Making consistent additional payments toward the principal balance will yield huge returns. You can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to keep track is by making 1 extra payment every year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some folks just can't make any extra payments. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay extra on your mortgage principal any time you get some extra money.
For example: five years after moving into your home, you get a huge tax refund,a very large legacy, or a cash gift; , you could pay this money toward your loan principal, resulting in significant savings and a shorter loan period. For most loans, even this relatively modest amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
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