Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that go to the principal. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is by making 1 additional mortgage payment every year. But many people won't be able to pull off such an enormous additional payment, so dividing a single additional payment into 12 additional monthly payments works too. Another popular option is to pay half of your payment every other week. The result is you make one additional monthly payment each year. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. But remember that most mortgages allow additional payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you get some extra money. If, for example, you receive an unexpected windfall just a few years into your mortgage, you could pay this money toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. For most loans, even a relatively modest amount, paid early in the loan period, could offer huge savings in interest and length of the loan.
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