Save on Your Mortgage

Paying regular additional payments on the loan principal can yield enormous savings. People employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to organize this process is to make one additional payment per year. But many folks will not be able to swing such an enormous additional expense, so splitting one additional payment into twelve additional monthly payments works too. Another option is to pay a half payment every two weeks. The result is you will make one extra monthly payment in a year. These options differ a little in reducing the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

Some people can't manage any extra payments. But you should remember that most mortgages allow additional principal payments at any time. You can take advantage of this provision to pay down your mortgage principal when you get some extra money.

Here's an example: several years after buying your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal will significantly reduce the period of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. For most loans, even a relatively small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.