Paying regular extra payments toward the principal balance provides huge savings. Borrowers can pay against principal in various ways. For many people,Perhaps the easiest way to keep track is by making one additional mortgage payment every year. If you can't afford to pay an additional whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment each year. These options differ a little in lowering the final payback amount and shortening payback length, but each will significantly reduce the duration 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 most mortgages will permit you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your mortgage principal when you get some extra money. If, for example, you receive a large gift or tax refund five years into your mortgage, paying several thousand dollars into your mortgage principal will reduce the duration of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. For most loans, even a modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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