Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which go to your loan principal. You can do this using a few different techniques. Paying 1 additional full payment one time every year is perhaps the simplest to keep track of. If you can't pay an additional whole payment all at once, 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 a half payment every other week. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
Some borrowers can't manage any extra payments. Remember that almost all mortgage contracts will allow you to make additional payments to your principal at any time. Whenever you get some extra cash, you can use this provision to pay a one-time additional payment toward your principal. For example: several years after moving into your home, you receive a very large tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can reduce the period of your loan and save enormously on mortgage interest over the duration of the mortgage loan. For most loans, even this modest amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.
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