Paying regular additional payments on your loan principal will yield big returns. Borrowers make this happen in several ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage 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 very popular option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment every year. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Some folks can't manage any extra payments. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your principal any time you get some extra money. If, for example, you receive an unexpected windfall five years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shortened payback period. For most loans, even this relatively modest amount, paid early in the loan period, could offer huge savings in interest and length of the loan.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.