Paying regular additional payments toward the principal balance yields big returns. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to keep track is to make one additional payment per year. Of course, many people will not be able to pull off such an enormous additional expense, so splitting one additional payment into twelve additional monthly payments works too. Finally, you can pay half of your mortgage payment every other week. Each option produces slightly different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Remember that most mortgages will permit you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you come into extra money. For example: a few years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , you could pay this windfall toward your loan principal, resulting in significant savings and a shorter payback period. For most loans, even this small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
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