Making consistent additional payments on the principal balance will provide huge savings. People employ various techniques to meet this goal. Making one extra full payment one time every year is perhaps the simplest to keep track of. However, many folks won't be able to afford this huge extra payment, so splitting an extra payment into 12 additional monthly payments works as well. Another very popular option is to pay a half payment every two weeks. The result is you make one additional monthly payment every year. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make any extra payments. But it's important to note that most mortgages will allow you to make additional payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money. Here's an example: a few years after moving into your home, you receive a very large tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your home's principal will significantly reduce the repayment period of your loan and save enormously on interest paid over the life of the loan. Unless the loan is quite large, even small amounts applied early can yield huge savings over the life of the loan.
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