Making regular extra payments on your principal provides enormous returns. You can accomplish this in several ways. For many people,Perhaps the simplest way to organize this process is to make 1 additional payment a year. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you make one extra monthly payment every year. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly shorten the length 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. But remember that most mortgage contracts allow you to make additional payments at any time. You can take advantage of this rule to pay down your principal any time you get some extra money.
If, for example, you receive an unexpected windfall three years into your mortgage, you could apply this windfall toward your mortgage loan principal, which would result in significant savings and a shorter loan period. Unless the mortgage loan is very large, even small amounts applied early can yield huge savings over the duration of the loan.
Do you have a question regarding a mortgage program?