There's a trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make additional payments which go to your loan principal. Borrowers can do this in several ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra payment per year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another option is to pay a half payment every two weeks. The result is you will make one additional monthly payment in a year. Each of these options produces different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Some borrowers can't manage any extra payments. But remember that most mortgage contracts will allow you to make additional principal payments at any time. You can benefit from this rule to pay down your mortgage principal when you come into extra money.
If, for example, you receive a surprise windfall just a few years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. Unless the loan is very large, even modest amounts applied early can yield huge savings over the duration of the loan.
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