Paying consistent additional payments toward your loan principal can yield big savings. Borrowers can do this in various ways. For many people,Perhaps the easiest way to organize this process is to make one extra payment per year. However, many folks won't be able to pull off such an enormous extra expense, so dividing a single additional payment into 12 extra monthly payments works too. Another option is to pay a half payment every other week. The result is you will make one extra monthly payment in a year. Each of these options produces different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay more every month or even every year. Keep in mind that almost all mortgage contracts will permit you to pay extra on your principal at any time. Any time you come into extra money, you can use this provision to pay a one-time additional payment on your principal.
If, for example, you receive a surprise windfall just a few years into your mortgage, you could pay this windfall toward your mortgage loan principal, resulting in huge savings and a shorter loan period. For most loans, even a modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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