Paying consistent extra payments toward the loan principal yields big returns. You can pay against principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make 1 additional payment a year. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some folks can't manage any extra payments. Keep in mind that virtually all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Whenever you come into extra cash, consider using this provision to pay a one-time additional payment on principal. If, for example, you were to receive an unexpected windfall four years into your mortgage, you could pay a portion of this windfall toward your mortgage loan principal, resulting in huge savings and a shorter payback period. Unless the mortgage loan is very large, even small amounts applied early can yield huge benefits over the life of the loan.
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