Save on your Mortgage Loan
Paying consistent additional payments on your loan principal provides big savings. Borrowers make this happen in several ways. Paying a single extra payment one time every year is likely the easiest to keep track of. But some people can't afford this huge extra expense, so dividing a single extra payment into twelve extra monthly payments is a great option too. Finally, you can commit to paying a half payment every other week. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Lump Sum Extra Payment
Some people just can't make extra payments. But remember that most mortgage contracts will allow you to make additional payments at any time. You can benefit from this provision to pay extra on your principal when you come into extra money. For example: a few years after buying your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal will significantly shorten the repayment duration of your loan and save enormously on mortgage interest over the duration of the mortgage loan. Unless the loan is quite large, even small amounts applied early in the loan period can produce huge benefits over the duration of the loan.