Paying consistent additional payments on the loan principal will provide big savings. Borrowers can pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making one additional mortgage payment per year. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. Whenever you get some unexpected cash, you can use this provision to pay an additional one-time payment on your principal. For example: five years after buying your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shorter payback period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer big savings in interest and length of the loan.
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