Save Big on Your Mortgage
Paying regular additional payments toward the principal balance provides enormous returns. Borrowers use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is to make one additional payment per year. However, many folks can't pull off this huge extra expense, so splitting one additional payment into twelve extra monthly payments works too. Finally, you can pay half of your mortgage payment every other week. Each of these options produces slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgages will allow you to make additional payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money.
For example: a few years after moving into your home, you get a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shortened payback period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can produce huge savings over the life of the loan.