Making regular extra payments on your loan principal provides significant returns. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to keep track is by making 1 additional payment per year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each of these options produces different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people just can't make extra payments. But you should remember that most mortgage contracts allow additional payments at any time. You can take advantage of this rule to pay down your principal any time you get some extra money. Here's an example: five years after moving into your home, you receive a very large tax refund,a very large inheritance, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal can shorten the repayment period of your loan and save enormously on mortgage interest over the duration of the loan. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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