Making regular extra payments on your principal balance will provide enormous returns. Borrowers pay extra in several different ways. For many people,Perhaps the easiest way to keep track is to make 1 extra payment a year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you will make one additional monthly payment in a year. Each option yields different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. Any time you come into unexpected cash, you can use this provision to pay an additional one-time payment on your mortgage principal.
If, for example, you were to receive a very large gift or tax refund four years into your mortgage, paying a few thousand dollars into your home's principal will shorten the duration of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. For most loans, even this small amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
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