Making regular additional payments toward the principal can yield huge returns. Borrowers accomplish this goal in several ways. Making a single extra payment one time every year may be the simplest to arrange. But some people can't pull off this huge extra payment, so splitting a single additional payment into 12 additional monthly payments works as well. Another option is to pay a half payment every other week. The result is you make one extra monthly payment in a year. Each option yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay extra every month or even every year. But remember that most mortgages will allow you to make additional payments at any time. You can benefit from this rule to pay extra on your mortgage principal any time you come into extra money. For example: five years after buying your home, you get a larger than expected tax refund,a very large legacy, or a cash gift; , you could apply this money toward your mortgage loan principal, which would result in significant savings and a shorter payback period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can yield huge benefits over the life of the loan.
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