Making regular additional payments on the principal can yield huge returns. You can do this in several ways. Paying a single additional payment one time every year is perhaps the simplest to arrange. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment every year. These options differ slightly in reducing 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 extra payments. But you should remember that most mortgages allow additional principal payments at any time. You can take advantage of this rule to pay extra on your principal any time you get some extra money.
Here's an example: several years after buying your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the period of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even this relatively modest amount, paid early in the mortgage, could offer big savings in interest and length of the loan.
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