Making consistent additional payments on your principal will provide big savings. People accomplish this goal in a few ways. For many people,Perhaps the simplest way to keep track is to make one extra mortgage payment every year. But many folks won't be able to pull off such a large extra payment, so dividing an extra payment into 12 extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options yields 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 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 get some extra money, consider using this rule to pay a one-time additional payment on mortgage principal.
For example: several years after moving into your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can significantly shorten the duration of your loan and save a huge amount on interest over the duration of the loan. For most loans, even a relatively modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
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