Making consistent additional payments on the loan principal will yield huge savings. You can do this in various ways. Making a single additional full payment once every year is perhaps the easiest to track. Of course, some folks will not be able to afford such an enormous extra payment, so dividing one 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 extra monthly payment every year. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But remember that most mortgages will allow you to make additional payments at any time. Whenever you come into unexpected money, you can use this provision to pay a one-time additional payment on your principal.
Here's an example: several years after moving into your home, you get a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal can significantly reduce the duration of your loan and save a huge amount on mortgage interest over the life of the loan. For most loans, even a modest amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
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