Making consistent extra payments toward the loan principal yields singificant savings. People employ various techniques to meet this goal. For many people,Perhaps the simplest way to organize this process is to make one extra mortgage payment every year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Some borrowers just can't make extra payments. But remember that most mortgage contracts allow additional payments at any time. You can benefit from this rule to pay down your mortgage principal when you come into extra money. For example: five years after buying your home, you receive a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even this modest amount, paid early enough in the loan period, could offer huge savings in interest and in the duration of the loan.
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