Paying regular additional payments on your principal balance provides huge returns. Borrowers can do this using a few different techniques. For many people,Perhaps the easiest way to organize this process is by making one additional payment every year. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money. If, for example, you receive a surprise windfall five years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in significant savings and a shorter loan period. For most loans, even this relatively small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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