Extra Payments Yield Huge Mortgage Savings
Making regular extra payments toward the principal will provide huge savings. Borrowers can pay against principal by employing various techniques. For many people,Perhaps the easiest way to keep track is by making 1 additional mortgage payment every year. But some people can’t pull off such an enormous additional expense, so splitting an extra payment into twelve extra monthly payments works too. Another option is to pay half of your payment every other week. The result is you will make one additional monthly payment each year. These options differ a little in lowering the total interest paid and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Additional One-time payment
Some people just can’t make any extra payments. But it’s important to note that most mortgages will allow additional payments at any time. You can benefit from this provision to pay down your principal when you get some extra money.
For example: several years after buying your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , paying several thousand dollars into your home’s principal can reduce the duration of your loan and save a huge amount on interest over the life of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.