Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments that apply to the loan principal. Borrowers pay extra in a few ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra payment every year. If you can't pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each option produces slightly different results, but they will all significantly shorten the length 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. But you should remember that most mortgages allow additional payments at any time. Any time you get some extra cash, consider using this provision to pay an additional one-time payment on mortgage principal.
Here's an example: a few years after moving into your home, you get a larger than expected tax refund,a very large inheritance, or a cash gift; , paying a few thousand dollars into your home's principal can shorten the duration of your loan and save a huge amount on interest paid over the life of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.
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