Making regular extra payments on the loan principal can yield big savings. Borrowers accomplish this goal in a few ways. Making 1 extra payment once every year is perhaps the easiest to keep track of. Of course, some people can't swing such an enormous extra payment, so splitting a single extra payment into twelve additional monthly payments is a great option too. Finally, you can pay a half payment every two weeks. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. But it's important to note that most mortgage contracts allow additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you come into extra money. If, for example, you receive an unexpected windfall five years into your mortgage, investing several thousand dollars into your mortgage principal will shorten the duration of your loan and save enormously on interest paid over the life of the mortgage loan. For most loans, even a relatively modest amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
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