Making regular extra payments toward the loan principal will provide singificant returns. Borrowers can accomplish this using a few different techniques. Paying 1 additional payment once every year is perhaps the simplest to keep track of. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every two weeks. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any time. Any time you get some unexpected money, you can use this rule to pay an additional one-time payment toward your mortgage principal.
If, for example, you were to receive a surprise windfall just a few years into your mortgage, paying several thousand dollars into your home's principal can significantly shorten the duration of your loan and save enormously on mortgage interest over the duration of the loan. For most loans, even a relatively small amount, paid early in the loan period, could offer huge savings in interest and length of the loan.
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