Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments which go to your loan principal. People employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is to make one extra payment a year. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another option is to pay a half payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Some folks just can't make any extra payments. Remember that almost all mortgages will permit you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay down your principal when you get some extra money.
If, for example, you receive an unexpected windfall four years into your mortgage, you could pay this windfall toward your loan principal, resulting in huge savings and a shortened loan period. For most loans, even a relatively modest amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
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