Paying consistent extra payments toward your loan principal will yield huge returns. Borrowers can pay against principal by employing various techniques. Paying a single additional full payment once a year is perhaps the simplest to arrange. But some folks will not be able to swing this huge additional expense, so splitting one extra payment into 12 extra monthly payments is a fine option too. Another popular option is to pay a half payment every two weeks. The result is you make one extra monthly payment each year. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage extra payments. But remember that most mortgages allow you to make additional payments at any time. Whenever you get some extra money, you can use this provision to make an additional one-time payment on your mortgage principal. For example: several years after moving into your home, you get a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal will significantly reduce the repayment period of your loan and save a huge amount on mortgage interest paid over the life of the loan. Unless the loan is very large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.
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