Save Big on your Mortgage Loan
Paying consistent extra payments toward the loan principal can yield huge returns. Borrowers employ various techniques to accomplish this goal. Paying one additional full payment once every year may be the simplest to keep track of. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay extra every month or even every year. Remember that almost all mortgages will permit you to pay extra on your principal at any time. You can take advantage of this rule to pay down your mortgage principal when you get some extra money. If, for example, you were to receive a large gift or tax refund three years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, which would result in significant savings and a shortened loan period. Unless the loan is quite large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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