Paying regular extra payments on your principal yields enormous returns. Borrowers pay extra on principal in many different ways. For many people,Perhaps the simplest way to organize this process is by making one additional payment per year. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each option yields different results, but each will significantly reduce 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 most mortgages will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra money, you can use this provision to make an additional one-time payment on your mortgage principal. If, for example, you receive an unexpected windfall just a few years into your mortgage, you could pay this money toward your loan principal, resulting in huge savings and a shortened loan period. For most loans, even this small amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.
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