Paying regular extra payments toward your principal balance yields enormous returns. People use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is to make one additional payment every year. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly shorten the length 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. But remember that most mortgage contracts allow you to make additional principal payments at any time. Any time you get some unexpected money, consider using this provision to make an additional one-time payment toward mortgage principal. If, for example, you were to 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. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.
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