Paying consistent extra payments on the principal balance yields huge returns. You can accomplish this in several ways. Paying a single extra payment once per year is perhaps the easiest to track. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option produces different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any time. Whenever you get some unexpected cash, you can use this provision to make an additional one-time payment on your mortgage principal. For example: several years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest over the duration of the mortgage loan. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
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