Paying consistent additional payments on the principal yields big returns. You can do this using a few different techniques. Paying one extra full payment once every year is perhaps the simplest to track. 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 make one extra monthly payment in a year. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Keep in mind that almost all mortgage contracts will allow you to pay extra on your principal at any time. Whenever you come into unexpected money, you can use this rule to pay an additional one-time payment toward principal. Here's an example: a few years after buying your home, you get a huge tax refund,a very large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can shorten the duration of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even this relatively small amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.
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