There's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make additional payments which go toward your loan principal. Borrowers can accomplish this in various ways. For many people,Perhaps the simplest way to organize this process is to make 1 additional payment every year. But some people will not be able to pull off such a large additional payment, so splitting an additional payment into twelve extra monthly payments is a great option too. Finally, you can pay half of your mortgage payment every two weeks. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more 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 point during repayment. Whenever you come into unexpected money, you can use this provision to pay an additional one-time payment on your principal.
If, for example, you receive a surprise windfall just a few years into your mortgage, investing several thousand dollars into your mortgage principal can reduce the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a relatively small amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.
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