Paying consistent extra payments toward your principal can yield singificant savings. You can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make one extra mortgage payment every year. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every two weeks. The effect here is that you make one additional monthly payment each year. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. Whenever you come into extra cash, consider using this rule to pay a one-time additional payment on principal. Here's an example: several years after moving into your home, you get a huge tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply this windfall toward your loan principal, which would result in huge savings and a shortened loan period. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can yield huge benefits over the duration of the loan.
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