There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that apply to your loan principal. Borrowers can do this in several ways. Making one extra full payment once per year is likely the simplest to track. If you can't pay an extra whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some borrowers can't manage any extra payments. But it's important to note that most mortgage contracts allow additional principal payments at any time. You can benefit from this rule to pay down your mortgage principal when you come into extra money. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a large inheritance, or a cash gift; , you could apply this money toward your mortgage loan principal, which would result in significant savings and a shorter loan period. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can produce huge benefits over the life of the loan.
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