Making consistent additional payments on the loan principal provides singificant savings. Borrowers can do this using a few different techniques. For many people,Perhaps the easiest way to keep track is to make one additional payment every year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option produces different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgages will permit you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay down your mortgage principal when you come into extra money.
If, for example, you receive an unexpected windfall four years into your mortgage, investing a few thousand dollars into your home's principal will shorten the repayment period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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