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Paying consistent extra payments toward your loan principal will provide enormous returns. People employ various techniques to accomplish this goal. For many people, perhaps the easiest way to keep track is to make 1 extra mortgage payment a year.
But some people will not be able to afford such an enormous extra expense, so splitting a single additional payment into twelve additional monthly payments works as well.
Another popular option is to pay half of your payment every two weeks. The result is you will make one additional monthly payment in a year. Each of these options yields different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. Remember that virtually all mortgages will allow you to make additional payments to your principal at any time. Any time you come into unexpected cash, you can use this provision to pay a one-time additional payment toward principal.
If, for example, you receive a surprise windfall just a few years into your mortgage, you could pay a portion of this windfall toward your loan principal, which would result in enormous savings and a shorter payback period. Unless the mortgage loan is very large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.
1st Piont Lending Inc. can walk you through the pitfalls of getting a mortgage.
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