Paying regular extra payments on your principal can yield enormous returns. You can pay more on principal in various ways. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment per year. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you come into unexpected cash, consider using this rule to pay an additional one-time payment on principal. If, for example, you receive an unexpected windfall three years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in huge savings and a shortened payback period. For most loans, even a modest amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
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