Paying consistent extra payments toward the loan principal yields huge savings. Borrowers pay against principal in many different ways. For many people,Perhaps the easiest way to keep track is to make 1 extra payment every year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option produces slightly different results, but they will all significantly reduce 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 mortgages will allow you to make additional principal payments at any time. Any time you get some unexpected money, you can use this provision to pay an additional one-time payment on mortgage principal.
For example: a few years after moving into your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , you could apply this windfall toward your loan principal, resulting in significant savings and a shorter payback period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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