Making consistent extra payments on the principal provides big savings. People make this happen in several ways. For many people,Perhaps the easiest way to keep track is to make one additional payment every year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The result is you make one additional monthly payment each year. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make extra payments. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay down your principal any time you come into extra money.
If, for example, you were to receive an unexpected windfall four years into your mortgage, paying several thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save enormously on interest over the life of the loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the life of the loan.
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