There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments that are applied toward your loan principal. Borrowers can accomplish this using a few different techniques. Paying 1 additional full payment once every year is probably the simplest to arrange. If you can't afford to 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 commit to paying half of your mortgage payment every two weeks. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some folks can't manage any extra payments. But it's important to note that most mortgages allow additional payments at any time. You can benefit from this rule to pay down your principal when you come into extra money.
If, for example, you receive a very large gift or tax refund five years into your mortgage, investing a few thousand dollars into your home's principal will reduce the duration of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge savings over the life of the loan.
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