Paying regular extra payments toward your principal yields big savings. You can accomplish this using a few different techniques. For many people,Perhaps the simplest way to organize this process is to make 1 additional payment a year. However, many folks can't pull off such a large extra payment, so splitting one additional payment into 12 extra monthly payments works too. Finally, you can commit to paying half of your mortgage payment every other week. Each option produces different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any time. Any time you come into extra cash, consider using this rule to make an additional one-time payment toward your mortgage principal. If, for example, you receive an unexpected windfall four years into your mortgage, you could pay this money toward your mortgage loan principal, resulting in huge savings and a shortened payback period. Unless the loan is very large, even modest amounts applied early in the loan period can yield huge benefits over the duration 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.