Making consistent additional payments toward your loan principal provides singificant returns. Borrowers can accomplish this in various ways. Making 1 extra full payment one time a year may be the easiest to arrange. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. 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 each year. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some borrowers just can't make extra payments. Keep in mind that most mortgage contracts will permit you to pay extra on your principal at any point during repayment. Any time you get some extra cash, you can use this rule to pay an additional one-time payment toward principal.
If, for example, you receive a surprise windfall five years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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