Paying regular additional payments on the loan principal provides enormous returns. Borrowers employ various techniques to accomplish this goal. Making a single extra full payment once every year may be the easiest to arrange. Of course, many folks will not be able to pull off such a large extra payment, so dividing one additional payment into twelve extra monthly payments is a great option too. Finally, you can pay half of your mortgage payment every two weeks. Each of these options produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow additional payments at any time. Whenever you get some unexpected money, you can use this rule to make an additional one-time payment on mortgage principal. If, for example, you receive a surprise windfall three years into your mortgage, paying a few thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save a huge amount on interest over the life of the loan. For most loans, even this small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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