Paying consistent extra payments toward your loan principal provides big savings. Borrowers pay more on principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is to make one extra payment per year. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each of these options yields different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that most mortgage contracts 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 any time you come into extra money. Here's an example: five years after buying your home, you get a huge tax refund,a very large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal can significantly shorten the period of your loan and save a huge amount on interest over the life of the loan. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge savings over the duration of the loan.
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