Paying regular extra payments on the principal will provide huge savings. People use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is to make one additional payment per year. However, many people won't be able to swing this huge additional payment, so dividing one extra payment into 12 additional monthly payments works as well. Another very popular option is to pay a half payment every other week. The result is you make one extra monthly payment every year. Each option produces different results, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay down your principal every month or even every year. But it's important to note that most mortgage contracts allow you to make additional principal payments at any time. Any time you get some extra money, consider using this provision to make a one-time additional payment on your principal.
If, for example, you receive a large gift or tax refund three years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shorter payback period. For most loans, even this modest amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
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