Paying consistent extra payments on the loan principal will provide big returns. You can accomplish this using a few different techniques. For many people,Perhaps the simplest way to keep track is to make one extra mortgage payment per year. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment each year. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow additional principal payments at any time. You can benefit from this provision to pay extra on your principal when you get some extra money. Here's an example: a few years after moving into your home, you get a larger than expected tax refund,a large legacy, or a cash gift; , investing several thousand dollars into your mortgage principal can reduce the period of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer big savings in interest and in the length of the loan.
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