Paying regular additional payments toward the loan principal yields big returns. People pay extra in a few different ways. For many people,Perhaps the simplest way to organize this process is by making 1 additional mortgage payment a year. However, many people will not be able to pull off this huge additional payment, so splitting a single extra payment into twelve extra monthly payments is a fine option too. Another option is to pay a half payment every two weeks. The result is you will make one additional monthly payment in a year. Each option yields different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks can't manage any extra payments. But remember that most mortgage contracts will allow you to make additional principal payments at any time. You can take advantage of this provision to pay down your principal when you come into extra money. For example: five years after moving into your home, you get a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , you could apply a portion of this money toward your mortgage loan principal, which would result in enormous savings and a shorter loan period. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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