Paying consistent extra payments toward the principal balance will yield huge returns. People employ various techniques to meet this goal. For many people,Perhaps the simplest way to organize this process is to make one extra mortgage payment per year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The result is you will make one additional monthly payment in a year. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some borrowers just can't make extra payments. Remember that virtually all mortgages will permit you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your principal any time you get some extra money.
If, for example, you were to receive a surprise windfall five years into your mortgage, you could apply this windfall toward your loan principal, resulting in huge savings and a shorter payback period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.
Do you have a question regarding a mortgage program?