Huge Interest Savings: Available to Anyone
Paying regular extra payments on the principal can yield singificant returns. People make this happen in several different ways. For many people,Perhaps the easiest way to organize this process is to make one extra payment a 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 write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay extra every month or even every year. But remember that most mortgages allow you to make additional principal payments at any time. You can benefit from this provision to pay down your principal when you come into extra money.
Here's an example: several years after buying your home, you get a very large tax refund,a large inheritance, or a cash gift; , you could apply this money toward your loan principal, resulting in enormous savings and a shortened loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.