Simple Ways to Save Big on Your Mortgage
Paying consistent additional payments toward the principal will yield enormous savings. You pay more on principal in many different ways. For many people,Perhaps the easiest way to organize this process is by making 1 extra 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. Finally, you can pay half of your mortgage payment every other week. Each of these options produces slightly different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgage contracts will allow additional principal payments at any time. You can benefit from this rule to pay extra on your principal any time you get some extra money. Here's an example: several years after moving into your home, you receive a larger than expected tax refund,a large legacy, or a cash gift; , you could apply a portion of this money toward your mortgage loan principal, which would result in significant savings and a shortened payback period. Unless the loan is very large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.