Paying regular extra payments toward the loan principal yields singificant returns. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to keep track is to make one extra mortgage payment per year. But many folks won't be able to swing such an enormous additional expense, so splitting a single extra payment into twelve extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. Each option yields different results, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers just can't make extra payments. Remember that most mortgages will permit you to pay extra on your principal at any point during repayment. Any time you come into unexpected cash, consider using this rule to make an additional one-time payment on your principal. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a very large legacy, or a cash gift; , investing a few thousand dollars into your mortgage principal will significantly reduce the period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. For most loans, even this modest amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
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