Paying consistent additional payments on your principal balance will yield enormous returns. Borrowers pay more on principal in various ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment per year. But many folks won't be able to swing such an enormous additional expense, so dividing an extra payment into twelve additional monthly payments works as well. Another popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment every year. Each option produces different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. 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 principal when you come into extra money.
If, for example, you receive a surprise windfall three years into your mortgage, investing a few thousand dollars into your mortgage principal will reduce the repayment duration of your loan and save a huge amount on mortgage interest over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
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