Paying consistent additional payments toward your principal balance provides enormous returns. People pay extra in several ways. For many people,Perhaps the easiest way to keep track is by making 1 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 pay that additional amount monthly. Another option is to pay half of your payment every two weeks. The effect here is that you make one additional monthly payment in a year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers just can't make extra payments. Remember that most mortgages will permit you to make additional payments to your principal at any time. Whenever you come into extra cash, you can use this provision to make a one-time additional payment toward principal. If, for example, you receive a surprise windfall just a few years into your mortgage, you could pay a portion of this windfall toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.
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