Making consistent extra payments on your principal balance yields enormous savings. Borrowers accomplish this goal in several ways. For many people,Perhaps the simplest way to organize this process is by making one additional mortgage payment per year. However, many people won't be able to swing such a large additional payment, so splitting a single additional payment into 12 extra monthly payments is a fine option too. Another option is to pay half of your payment every two weeks. The effect here is that you make one additional monthly payment every year. Each of these options produces slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay more every month or even every year. But remember that most mortgages allow additional payments at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you come into extra money. Here's an example: a few years after buying your home, you receive a very large tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on interest paid over the duration of the loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
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