Paying regular additional payments toward the loan principal will provide singificant savings. Borrowers can do this in various ways. Making 1 extra full payment once every year is perhaps the easiest to arrange. But many people can't swing such an enormous additional expense, so splitting a single additional payment into 12 additional monthly payments is a fine option too. Another option is to pay half of your payment every two weeks. The result is you make one additional monthly payment in a year. Each of these options produces different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any time. Any time you get some extra cash, consider using this provision to pay an additional one-time payment toward your principal.
Here's an example: several years after moving into your home, you get a huge tax refund,a very large inheritance, or a cash gift; , you could apply this windfall toward your loan principal, resulting in enormous savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early can yield huge savings over the life of the loan.
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