Making consistent extra payments toward the loan principal will provide enormous savings. Borrowers pay extra in several different ways. For many people,Perhaps the easiest way to keep track is to make one additional mortgage payment a year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgage contracts allow additional principal payments at any time. You can take advantage of this rule to pay down your principal any time you come into extra money.
Here's an example: several years after moving into your home, you get a huge tax refund,a large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your home's principal will significantly shorten the duration of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even a relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
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