Making consistent additional payments toward the principal will yield big savings. Borrowers pay extra in several different ways. Paying a single extra full payment once every year is probably the easiest to keep track of. But some people won't be able to afford such a large extra expense, so dividing a single extra payment into twelve additional monthly payments works too. Another popular option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment every year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. Whenever you come into extra money, you can use this provision to make an additional one-time payment toward your mortgage principal. If, for example, you receive a large gift or tax refund just a few years into your mortgage, you could apply this money toward your mortgage loan principal, which would result in enormous savings and a shortened loan period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.
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