Paying consistent additional payments on your principal will provide enormous returns. People use different methods to accomplish this goal. Making 1 extra payment one time per year may be the simplest to keep track of. However, some folks won't be able to afford this huge extra expense, so splitting one extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay half of your mortgage payment every two weeks. Each option yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. But it's important to note that most mortgage contracts allow additional payments at any time. You can benefit from this rule to pay down your principal any time you come into extra money. Here's an example: several years after buying your home, you get a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply this money toward your mortgage loan principal, which would result in huge savings and a shorter loan period. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
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