Paying regular extra payments toward the loan principal yields big returns. Borrowers can accomplish this in several ways. For many people,Perhaps the simplest way to organize this process is by making one additional payment a year. Of course, many people won't be able to pull off such a large additional expense, so dividing a single extra payment into 12 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 each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. You can take advantage of this rule to pay down your mortgage principal when you get some extra money. If, for example, you receive a large gift or tax refund three years into your mortgage, paying a few thousand dollars into your home's principal can reduce the repayment period of your loan and save a huge amount on interest paid over the life of the loan. For most loans, even a modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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