Paying regular extra payments on the principal yields enormous returns. You pay against principal by employing various techniques. For many people,Perhaps the simplest way to organize this process is to make 1 additional mortgage payment a year. However, some folks won't be able to pull off this huge extra expense, so splitting a single additional payment into twelve additional monthly payments works as well. Another popular option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment each year. Each option yields different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Keep in mind that virtually all mortgage contracts will permit you to pay extra on your principal at any time. You can benefit from this provision to pay down your mortgage principal any time you get some extra money.
Here's an example: a few years after buying your home, you get a huge tax refund,a very large inheritance, or a cash gift; , paying several thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save enormously on interest paid over the duration of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early can produce huge benefits over the duration of the loan.
Do you have a question regarding a mortgage program?