Paying consistent extra payments toward your loan principal yields big savings. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment a year. But some folks can't afford such a large additional expense, so splitting one additional payment into 12 extra monthly payments is a great option too. Finally, you can pay a half payment every other week. 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 can't manage extra payments. Remember that virtually all mortgage contracts will allow you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your principal when you come into extra money.
Here's an example: a few years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , investing several thousand dollars into your home's principal can reduce the duration of your loan and save enormously on mortgage interest over the duration of the loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.
Do you have a question regarding a mortgage program?