Making regular additional payments toward the loan principal will yield singificant returns. Borrowers can accomplish this in several ways. Paying one additional payment once per year may be the simplest to arrange. Of course, some folks won't be able to afford such a large additional expense, so splitting a single extra payment into twelve additional monthly payments is a great option too. Another option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment in a year. Each of these options yields slightly different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some people can't manage extra payments. But it's important to note that most mortgages 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. If, for example, you receive an unexpected windfall three years into your mortgage, investing several thousand dollars into your home's principal can significantly shorten the repayment period of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even this small amount, paid early in the loan period, could offer big savings in interest and duration of the loan.
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