Making regular extra payments toward your principal balance will provide big savings. Borrowers pay extra in a few ways. Making 1 extra payment once per year may be the easiest to arrange. Of course, many people won't be able to pull off such a large additional expense, so dividing an additional payment into twelve extra monthly payments is a fine option too. Another option is to pay half of your payment every two weeks. The effect here is that you will make one additional monthly payment in a year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgage contracts will allow additional principal payments at any time. You can take advantage of this rule to pay extra on your principal any time you get some extra money. Here's an example: several years after buying your home, you get a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your home's principal will significantly shorten the period of your loan and save enormously on mortgage interest paid over the life of the loan. Unless the mortgage loan is quite large, even small amounts applied early can produce huge savings over the duration of the loan.
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