Paying consistent additional payments on the loan principal yields big savings. Borrowers make this happen in several ways. For many people,Perhaps the easiest way to keep track is to make one extra payment every year. But some folks won't be able to swing such an enormous extra payment, so dividing one additional payment into twelve additional monthly payments is a great option too. Another very popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment in a year. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. But you should remember that most mortgage contracts allow additional payments at any time. You can benefit from this rule to pay down your mortgage principal when you get some extra money. If, for example, you receive an unexpected windfall just a few years into your mortgage, you could pay a portion of this money toward your loan principal, resulting in enormous savings and a shortened loan period. For most loans, even a relatively modest amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
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