Huge Interest Savings: Available to Anyone with a Mortgage
Making consistent extra payments toward the principal balance provides big returns. Borrowers can pay against principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making one additional mortgage payment per year. 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. Another option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment each year. Each option produces different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
One-time Additional Payment
Some borrowers can't manage any extra payments. But it's important to note that most mortgages allow additional principal payments at any time. Whenever you come into extra money, you can use this provision to pay an additional one-time payment toward your principal. For example: a few years after buying your home, you receive a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply this windfall toward your loan principal, which would result in enormous savings and a shorter payback period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the duration of the loan.