Paying consistent additional payments toward your principal yields big returns. People make this happen in a few ways. Paying a single extra full payment once per year is likely the easiest to keep track of. Of course, some people can't swing such an enormous additional expense, so splitting one additional payment into 12 extra monthly payments works too. Finally, you can commit to paying a half payment every two weeks. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgage contracts allow you to make additional payments at any time. Any time you get some unexpected cash, you can use this rule to pay an additional one-time payment on mortgage principal. For example: five years after moving into your home, you receive a very large tax refund,a very large legacy, or a cash gift; , you could apply this money toward your mortgage loan principal, resulting in significant savings and a shortened payback period. For most loans, even a small amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
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