Paying consistent additional payments toward your principal can yield enormous returns. Borrowers pay extra in several ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra mortgage payment per year. But some people won't be able to afford such a large extra expense, so splitting one additional payment into twelve additional monthly payments works too. Finally, you can pay a half payment every two weeks. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you get some extra money. If, for example, you were to receive an unexpected windfall four years into your mortgage, investing several thousand dollars into your home's principal will significantly reduce the repayment period of your loan and save enormously on interest paid over the duration of the loan. For most loans, even this relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
Do you have a question regarding a mortgage program?