Paying regular additional payments toward the principal balance will yield huge returns. Borrowers employ various techniques to accomplish this goal. Paying one additional full payment once per year is perhaps the easiest to keep track of. If you can't pay an additional 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 result is you make one extra monthly payment each year. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. Remember that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay down your mortgage principal when you come into extra money. If, for example, you receive a very large gift or tax refund five years into your mortgage, you could apply this money toward your mortgage loan principal, which would result in significant savings and a shortened loan period. For most loans, even this small amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.
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