Paying consistent extra payments on your principal balance will provide enormous returns. People employ various techniques to accomplish this goal. Paying a single extra full payment one time every year is probably the simplest to keep track of. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The result is you make one extra monthly payment in a year. Each of these options yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgage contracts allow you to make additional payments at any time. You can benefit from this provision to pay down your principal when you come into extra money.
For example: a few years after moving into your home, you get a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can reduce the duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. For most loans, even this modest amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
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