Paying regular additional payments on the loan principal provides huge returns. Borrowers can accomplish this using a few different techniques. Paying one extra full payment one time per year may be the simplest to keep track of. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. Each option produces different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this provision to pay extra on your principal any time you come into extra money. For example: five years after buying your home, you receive a very large tax refund,a very large legacy, or a cash gift; , investing several thousand dollars into your mortgage principal will shorten the duration of your loan and save enormously on interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.
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