Paying regular additional payments toward your loan principal can yield huge returns. People use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is by making one extra mortgage payment a 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 other week. The effect here is that you will make one additional monthly payment every year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Some folks just can't make any extra payments. Remember that most mortgages will permit you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay extra on 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, you could pay a portion of this windfall toward your loan principal, resulting in huge savings and a shortened payback period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge benefits over the life of the loan.
Do you have a question regarding a mortgage program?