Here's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments that apply to the principal. Borrowers accomplish this goal in several ways. For many people,Perhaps the simplest way to organize this process is to make one additional payment a year. But many people can't pull off this huge extra payment, so dividing an extra payment into 12 additional monthly payments works too. Another very popular option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment in a year. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some people can't manage extra payments. Remember that most mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Any time you get some extra cash, consider using this provision to pay a one-time additional payment toward your mortgage principal.
If, for example, you were to receive an unexpected windfall four years into your mortgage, paying several thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save a huge amount on interest paid over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
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