Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments that apply to your loan principal. People make this happen in several different ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra payment a year. If you can't pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment in a year. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgages will permit you to pay extra on your principal at any time. You can benefit from this provision to pay down your mortgage principal any time you get some extra money. For example: a few years after moving into your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , paying several thousand dollars into your home's principal can shorten the repayment duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the length of the loan.
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