Paying regular additional payments on the principal balance can yield enormous savings. People employ various techniques to meet this goal. Paying one additional full payment one time every year may be the easiest to keep track of. But some people won't be able to swing such a large extra expense, so dividing a single additional payment into 12 additional monthly payments is a fine option too. Another very popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment every year. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Some folks just can't make extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. Whenever you get some unexpected cash, consider using this rule to pay an additional one-time payment toward your mortgage principal. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shortened loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.
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