Making consistent extra payments toward the principal will yield huge savings. Borrowers pay extra on principal by employing various techniques. Paying a single additional payment one time per year is likely the simplest to arrange. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment every year. Each of these options yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts allow you to make additional payments at any time. Whenever you come into unexpected cash, you can use this provision to make a one-time additional payment toward your principal.
If, for example, you receive a surprise windfall just a few years into your mortgage, you could pay this windfall toward your loan principal, which would result in huge savings and a shortened payback period. For most loans, even a relatively small amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
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