Making regular additional payments toward your loan principal provides big returns. Borrowers pay extra on principal by employing various techniques. Paying a single extra full payment one time per year may be the easiest to keep track of. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each option yields different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Some borrowers just can't make any extra payments. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your principal any time you come into extra money.
If, for example, you receive a surprise windfall four years into your mortgage, you could pay this windfall toward your mortgage loan principal, resulting in huge savings and a shorter loan period. For most loans, even this small amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.
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