Making regular extra payments on the loan principal will provide big savings. Borrowers pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making 1 extra mortgage payment per year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment each year. These options differ slightly in lowering the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. Keep in mind that almost all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money.
If, for example, you were to receive a large gift or tax refund four years into your mortgage, you could apply this money toward your mortgage loan principal, which would result in huge savings and a shortened loan period. Unless the mortgage loan is very large, even small amounts applied early in the loan period can yield huge benefits over the life of the loan.
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