Paying regular extra payments on the principal can yield enormous returns. Borrowers can pay extra on principal in various ways. For many people,Perhaps the simplest way to organize this process is to make one extra mortgage payment per year. But many folks will not be able to afford such an enormous extra expense, so dividing a single extra payment into twelve additional monthly payments works as well. Another very popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment every year. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some folks can't manage any extra payments. But it's important to note that most mortgages will allow additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you come into extra money. For example: five years after moving into your home, you get a larger than expected tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and duration of the loan.
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