Paying consistent additional payments on the principal balance yields big returns. People accomplish this goal in several different ways. Paying a single additional payment once per year is likely the easiest to keep track of. If you can't afford to 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. Finally, you can commit to paying a half payment every two weeks. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers just can't make any extra payments. But you should remember that most mortgages allow you to make additional payments at any time. Whenever you come into extra money, you can use this provision to make an additional one-time payment on your principal.
Here's an example: a few years after buying your home, you get a huge tax refund,a large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save enormously on mortgage interest paid over the life of the loan. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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