Paying consistent extra payments toward your principal can yield big savings. Borrowers employ various techniques to accomplish this goal. Paying a single extra full payment one time a year is likely the simplest to arrange. 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 option is to pay a half payment every two weeks. The result is you make one additional monthly payment every year. These options differ slightly in reducing the total interest paid and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some folks can't manage extra payments. Remember that almost all mortgage contracts will permit you to pay extra on your principal at any time. Whenever you come into extra cash, you can use this rule to pay an additional one-time payment toward principal. Here's an example: a few years after moving into your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal will reduce the repayment duration of your loan and save a huge amount on mortgage interest over the life of the loan. Unless the loan is very large, even small amounts applied early can produce huge benefits over the life of the loan.
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