Making regular extra payments on your loan principal will provide huge returns. You can pay against principal by employing various techniques. For many people,Perhaps the simplest way to organize this process is by making one additional payment every year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The effect here is that you make one additional monthly payment each year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Some folks just can't make extra payments. Remember that most mortgage contracts will permit you to make additional payments to your principal at any time. You can take advantage of this provision to pay extra on your principal any time you get some extra money. For example: five years after buying your home, you get a larger than expected tax refund,a large inheritance, or a cash gift; , you could apply a portion of this money toward your mortgage loan principal, resulting in significant savings and a shortened payback period. For most loans, even a modest amount, paid early enough in the loan period, could offer big savings in interest and in the duration of the loan.
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