Making regular extra payments on the loan principal will provide huge returns. Borrowers can pay more on principal in various ways. Making a single additional full payment once every year may be the easiest to track. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment every year. Each of these options produces different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make any extra payments. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any time. Whenever you get some extra cash, consider using this provision to pay a one-time additional payment toward mortgage principal. Here's an example: five years after moving into your home, you get a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , you could pay a portion of this windfall toward your mortgage loan principal, resulting in significant savings and a shorter loan period. For most loans, even a relatively small amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
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