Making consistent additional payments toward the principal balance will provide huge returns. Borrowers pay extra in a few ways. For many people,Perhaps the simplest way to organize this process is by making one extra mortgage payment per year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you will make one additional monthly payment every year. Each option produces different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people just can't make any extra payments. But it's important to note that most mortgage contracts will allow additional principal payments at any time. Whenever you come into unexpected cash, you can use this provision to pay an additional one-time payment on your mortgage principal.
If, for example, you receive an unexpected windfall three years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, which would result in significant savings and a shorter payback period. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and length of the loan.
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