Paying consistent additional payments toward your principal yields big savings. Borrowers can accomplish this using a few different techniques. Making 1 extra full payment once a year is probably the easiest to keep track of. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment each year. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. But it's important to note that most mortgages allow you to make additional principal payments at any time. You can benefit from this rule to pay down your principal when you come into extra money.
For example: a few years after buying your home, you get a huge tax refund,a very large inheritance, or a cash gift; , paying a few thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on mortgage interest over the life of the mortgage loan. Unless the loan is very large, even modest amounts applied early can produce huge savings over the life of the loan.
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