Making regular additional payments on the loan principal provides enormous savings. Borrowers pay extra in several ways. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment every year. However, many people can't swing this huge extra expense, so splitting an additional payment into 12 additional monthly payments is a great option too. Another popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment every year. Each of these options yields different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some people can't manage extra payments. Remember that almost all mortgages will permit you to make additional payments to your principal at any point during repayment. Whenever you come into unexpected money, you can use this provision to make an additional one-time payment on principal. If, for example, you were to receive a large gift or tax refund just a few years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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