Making consistent additional payments on the principal will provide significant savings. Borrowers make this happen in a few different ways. For many people,Perhaps the easiest way to keep track is to make 1 extra mortgage payment every year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay a half payment every other week. The result is you make one extra monthly payment each year. Each option produces slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay down your principal any time you come into extra money.
If, for example, you receive a surprise windfall three years into your mortgage, paying a few thousand dollars into your mortgage principal will reduce the period of your loan and save a huge amount on mortgage interest paid over the life of the loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
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