Paying regular extra payments on your loan principal will provide significant savings. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to keep track is to make one extra payment per year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The result is you will make one additional monthly payment every year. Each of these options yields different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgages will allow you to pay extra on your principal at any time. Any time you come into unexpected cash, consider using this rule to pay an additional one-time payment toward your mortgage principal.
For example: five years after buying your home, you receive a very large tax refund,a large inheritance, or a cash gift; , you could apply this windfall toward your mortgage loan principal, resulting in enormous savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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