Making regular extra payments toward the loan principal will yield enormous savings. Borrowers make this happen in a few ways. Making one extra payment once every year may be the simplest to keep track of. But many folks will not be able to afford this huge additional payment, so dividing an additional payment into 12 extra monthly payments is a great option too. Another option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment in a year. Each option produces different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks can't manage any extra payments. Keep in mind that most mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this provision to pay down your principal any time you get some extra money. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , you could pay this money toward your loan principal, resulting in enormous savings and a shortened loan period. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
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