There's a trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments that apply to the loan principal. You can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment every year. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment each year. These options differ a little in lowering the total interest paid and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Remember that almost all mortgage contracts will permit you to pay extra on your principal at any time. Any time you get some unexpected money, you can use this rule to pay a one-time additional payment on principal. If, for example, you receive a large gift or tax refund five years into your mortgage, paying several thousand dollars into your mortgage principal will significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest over the life of the loan. For most loans, even a modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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