Paying consistent extra payments toward your principal provides huge savings. Borrowers pay extra in a few ways. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment a year. However, many folks will not be able to pull off such an enormous additional payment, so splitting one additional payment into 12 additional monthly payments is a great option too. Finally, you can commit to paying a half payment every other week. Each of these options produces different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some people can't manage extra payments. But remember that most mortgages allow you to make additional principal payments at any time. Whenever you come into extra money, you can use this provision to make an additional one-time payment on principal. Here's an example: several years after buying your home, you get a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could pay this money toward your loan principal, resulting in enormous savings and a shorter loan period. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
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