Making consistent additional payments on your loan principal provides enormous returns. You can do this in various ways. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment every year. But many folks won't be able to afford such a large extra expense, so dividing an extra payment into 12 extra monthly payments is a fine option too. Another popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment every year. Each of these options yields different results, but they will all significantly shorten 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. But it's important to note that most mortgage contracts allow you to make additional principal payments at any time. Whenever you come into extra money, you can use this rule to make an additional one-time payment on your principal.
If, for example, you receive a very large gift or tax refund just a few years into your mortgage, you could pay this money toward your mortgage loan principal, resulting in significant savings and a shorter loan period. For most loans, even a modest amount, paid early in the loan period, could offer big savings in interest and duration of the loan.
Do you have a question regarding a mortgage program?