Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments which go to your principal. Borrowers can accomplish this in various ways. Paying 1 additional payment once a year is perhaps the easiest to track. 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 pay that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any time. Any time you come into unexpected money, you can use this provision to make a one-time additional payment toward your principal.
For example: five years after moving into your home, you receive a very large tax refund,a large inheritance, or a cash gift; , investing several thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on interest over the life of the mortgage loan. Unless the loan is very large, even small amounts applied early can produce huge benefits over the life of the loan.
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