Paying consistent additional payments on your principal balance will yield big returns. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is to make one additional payment a 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. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment every year. These options differ a little in lowering the total interest paid and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgage contracts will allow additional principal payments at any time. Whenever you come into unexpected money, you can use this provision to pay a one-time additional payment on mortgage principal. If, for example, you receive a surprise windfall just a few years into your mortgage, you could pay this windfall toward your loan principal, resulting in huge savings and a shortened payback period. For most loans, even a small amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.
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