Paying consistent additional payments on your loan principal will yield big 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 every year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. The result is you will make one extra monthly payment every year. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Some borrowers can't manage any extra payments. But you should remember that most mortgages will allow additional principal payments at any time. You can benefit from this provision to pay down your principal when you come into extra money. If, for example, you were to receive an unexpected windfall three years into your mortgage, investing a few thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the loan. Unless the loan is very large, even modest amounts applied early in the loan period can produce huge benefits over the duration of the loan.
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