Paying regular additional payments toward your loan principal will provide big returns. People use different methods to meet this goal. For many people,Perhaps the simplest way to keep track is by making one additional payment every year. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. Each of these options yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgage contracts will allow additional payments at any time. Any time you come into extra money, you can use this rule to make an additional one-time payment on principal.
If, for example, you were to receive a large gift or tax refund four years into your mortgage, you could apply this money toward your loan principal, which would result in enormous savings and a shorter loan period. For most loans, even a small amount, paid early in the loan period, could offer big savings in interest and duration of the loan.
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