Paying consistent additional payments on the principal yields huge returns. People make this happen in several ways. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment a year. However, many folks can't swing this huge additional expense, so dividing an extra payment into twelve additional monthly payments works as well. Finally, you can commit to paying a half payment every other week. Each option produces different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages will allow you to make additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you come into extra money.
If, for example, you receive a large gift or tax refund three years into your mortgage, paying a few thousand dollars into your home's principal will significantly reduce the repayment period of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.
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