Paying consistent additional payments on the loan principal will yield huge savings. Borrowers can pay against principal in various ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra mortgage payment a year. But many people can't swing such an enormous extra payment, so splitting an additional payment into twelve additional monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options produces slightly different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. Keep in mind that most mortgages will allow you to pay extra on your principal at any time. You can benefit from this provision to pay extra on your principal when you get some extra money.
If, for example, you receive a large gift or tax refund five years into your mortgage, you could apply this money toward your mortgage loan principal, which would result in significant savings and a shorter payback period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.
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