Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments that go to your principal. Borrowers use different methods to meet this goal. Paying a single extra payment one time a year is probably the easiest to track. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each of these options yields slightly different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgages will allow you to make additional payments to your principal at any time. Any time you come into unexpected money, consider using this provision to pay an additional one-time payment on mortgage principal. Here's an example: several years after moving into your home, you receive a very large tax refund,a very large legacy, or a cash gift; , investing a few thousand dollars into your home's principal will reduce the repayment period of your loan and save enormously on interest over the duration of the loan. For most loans, even this small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
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