Paying regular extra payments toward your principal balance will provide big returns. Borrowers use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is to make 1 additional payment per year. But many folks won't be able to afford such a large additional expense, so splitting an extra payment into twelve additional monthly payments works as well. Another option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment in a year. These options differ slightly in reducing the final payback amount and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages allow additional principal payments at any time. You can benefit from this rule to pay down your mortgage principal any time you come into extra money. Here's an example: five years after buying your home, you get a huge tax refund,a large legacy, or a cash gift; , you could pay a portion of this windfall toward your loan principal, resulting in enormous savings and a shortened payback period. Unless the mortgage loan is quite large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.
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