Making regular additional payments toward the principal balance provides huge savings. Borrowers employ various techniques to accomplish this goal. Making a single additional full payment once every year may be the simplest to keep track of. Of course, some folks won't be able to afford such an enormous additional payment, so splitting an additional payment into twelve extra monthly payments is a fine option too. 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 every year. Each of these options produces slightly 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 more every month or even every year. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any time. Whenever you get some unexpected cash, you can use this rule to pay an additional one-time payment toward principal. If, for example, you receive a surprise windfall three years into your mortgage, investing several thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.
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