Paying consistent extra payments on the loan principal can yield huge savings. Borrowers pay extra on principal in various ways. For many people,Perhaps the easiest way to keep track is to make 1 additional payment per year. But some people can't afford such an enormous additional expense, so dividing one additional payment into 12 additional monthly payments is a fine option too. Finally, you can pay half of your mortgage payment every other week. Each option 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.
Some folks just can't make extra payments. Keep in mind that most mortgages will allow you to pay extra on your principal at any time. You can benefit from this rule to pay down your principal when you get some extra money. For example: five years after moving into your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal will significantly shorten the repayment duration of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. Unless the loan is very large, even modest amounts applied early in the loan period can yield huge benefits over the duration of the loan.
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