Making regular extra payments toward your loan principal provides huge savings. Borrowers can pay extra on principal in many different ways. Making one extra payment once per year may be the simplest to arrange. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment each year. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make any extra payments. Keep in mind that almost all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your mortgage principal when you get some extra money. If, for example, you receive an unexpected windfall three years into your mortgage, investing several thousand dollars into your mortgage principal can significantly reduce the repayment period of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even this relatively small amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.
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