Paying regular extra payments toward your principal balance will yield enormous returns. Borrowers accomplish this goal in several ways. Making 1 additional full payment once every year may be the easiest to track. But some folks will not be able to pull off such an enormous extra payment, so dividing an additional payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. Each of these options produces different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Keep in mind that most mortgages will permit you to pay extra on your principal at any point during repayment. Whenever you come into extra cash, you can use this rule to make a one-time additional payment on mortgage principal.
If, for example, you were to receive a surprise windfall three years into your mortgage, paying several thousand dollars into your mortgage principal will significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest paid over the life of the loan. Unless the 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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