Making consistent extra payments on the principal balance can yield enormous savings. People make this happen in a few ways. Making one extra payment once per year is perhaps the easiest to arrange. But many people won't be able to pull off this huge additional payment, so dividing an extra payment into twelve additional monthly payments is a great option too. Finally, you can commit to paying a half payment every other week. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgage contracts allow additional principal payments at any time. You can take advantage of this rule to pay down your principal any time you come into extra money.
For example: several years after moving into your home, you get a huge tax refund,a very large legacy, or a non-taxable cash gift; , you could apply this windfall toward your mortgage loan principal, resulting in significant savings and a shorter loan period. Unless the loan is very large, even small amounts applied early can produce huge benefits over the duration of the loan.
Do you have a question regarding a mortgage program?