Making regular extra payments on the loan principal will yield singificant returns. Borrowers use different methods to meet this goal. For many people,Perhaps the easiest way to organize this process is by making one extra payment per year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment every year. Each of these options yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life 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. You can take advantage of this provision to pay down your principal when you get some extra money.
If, for example, you were to receive a surprise windfall four years into your mortgage, paying a few thousand dollars into your home's principal will significantly shorten the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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