Paying regular extra payments toward the loan principal provides big savings. People use different methods to accomplish this goal. For many people,Perhaps the simplest way to organize this process is to make one additional mortgage payment every year. If you can't pay an extra whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment every year. Each option yields different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration 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 mortgages allow you to make additional principal payments at any time. You can benefit from this rule to pay down your principal any time you get some extra money. If, for example, you were to receive a very large gift or tax refund four years into your mortgage, paying a few thousand dollars into your home's principal will shorten the repayment duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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