Save Big on your Mortgage Loan
Paying consistent additional payments toward the principal yields singificant returns. Borrowers pay extra in a few different ways. Making one additional payment one time a year may be the simplest to keep track of. If you can't afford to pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The result is you will make one extra monthly payment every year. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Additional One-time payment
It may not be possible for you to pay extra every month or even every year. But remember that most mortgage contracts will allow additional payments at any time. Any time you come into unexpected money, you can use this provision to pay a one-time additional payment toward your principal.
Here's an example: several years after moving into your home, you receive a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply this money toward your loan principal, which would result in huge savings and a shorter loan period. For most loans, even a relatively small amount, paid early enough in the loan period, could offer huge savings in interest and duration of the loan.
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