Paying regular additional payments toward the loan principal provides enormous returns. You can do this in various ways. For many people,Perhaps the simplest way to organize this process is to make 1 additional payment a year. However, many folks can't afford this huge additional expense, so splitting an additional payment into twelve additional monthly payments is a great option too. Another popular option is to pay half of your payment every two weeks. The result is you will make one additional monthly payment each year. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay more every month or even every year. Remember that almost all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Any time you come into unexpected cash, you can use this rule to make an additional one-time payment toward your mortgage principal. If, for example, you were to receive a large gift or tax refund five years into your mortgage, investing a few thousand dollars into your home's principal can significantly reduce the repayment period of your loan and save enormously on interest paid over the life of the mortgage loan. For most loans, even this relatively small amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
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