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Making consistent additional payments on your loan principal yields enormous returns. Borrowers can pay extra on principal in many different ways. Paying 1 additional payment once a year may be the easiest to arrange. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment each year. Each option yields different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.

One-time Additional Payment

Some folks can't manage extra payments. Remember that virtually all mortgages will permit you to make additional payments to your principal at any time. You can benefit from this provision to pay extra on your principal any time you come into extra money. For example: five years after buying your home, you get a larger than expected tax refund,a very large legacy, or a cash gift; , you could apply this windfall toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even a relatively small amount, paid early in the loan period, could offer big savings in interest and duration of the loan.

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