There's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments that go to your loan principal. You can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment per year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The result is you will make one extra monthly payment in a year. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some folks can't manage extra payments. But remember that most mortgages will allow additional principal payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money.
Here's an example: a few years after buying your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , investing several thousand dollars into your home's principal can shorten the period of your loan and save a huge amount on interest paid over the duration of the loan. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
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