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 which apply to the principal. Borrowers make this happen in several different ways. For many people,Perhaps the easiest way to organize this process is to make 1 additional payment per year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. 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 shortening 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. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any point during repayment. Any time you get some unexpected money, you can use this provision to pay a one-time additional payment on principal. Here's an example: five years after moving into your home, you get a larger than expected tax refund,a large inheritance, or a cash gift; , investing a few thousand dollars into your home's principal can significantly reduce the repayment period of your loan and save enormously on interest over the life of the loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.
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