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Making consistent extra payments on your loan principal will provide big returns. People use different methods to meet this goal. Paying one additional payment once per year is perhaps the easiest to keep track of. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. 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 duration of the loan.

Lump Sum Extra Payment

Some people just can't make extra payments. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any point during repayment. Any time you come into unexpected money, you can use this rule to pay a one-time additional payment on your mortgage principal.

If, for example, you were to receive a surprise windfall just a few years into your mortgage, investing several thousand dollars into your home's principal will shorten the repayment period of your loan and save enormously on mortgage interest over the duration of the mortgage loan. For most loans, even a relatively modest amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.

Alliance Mortgage and Marketing can walk you Alliance Mortgage and Marketing has your mortgage answers. Call us: (916) 473-1317.