Paying consistent additional payments toward the principal balance yields huge returns. You can accomplish this in various ways. Paying 1 additional full payment one time per year is perhaps the simplest to track. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Remember that almost all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay down your mortgage 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 pay this windfall toward your loan principal, which would result in huge savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.
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