Paying consistent additional payments on your loan principal yields huge savings. Borrowers can do this using a few different techniques. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment a year. However, many folks will not be able to swing such a large additional payment, so dividing one additional payment into 12 additional monthly payments is a great option too. Finally, you can commit to paying a half payment every two weeks. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some people can't manage extra payments. But it's important to note that most mortgages will allow you to make additional principal payments at any time. You can benefit from this provision to pay extra on your principal any time you come into extra money. If, for example, you were to receive an unexpected windfall four years into your mortgage, paying a few thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on interest paid over the life of the loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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