Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments which go toward the loan principal. You can accomplish this using a few different techniques. For many people,Perhaps the simplest way to organize this process is to make one additional mortgage payment every year. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment every year. Each of these options yields different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. Keep in mind that virtually all mortgages will permit you to pay extra on your principal at any time. You can take advantage of this provision to pay down your principal any time you come into extra money. If, for example, you receive a surprise windfall three years into your mortgage, paying several thousand dollars into your mortgage principal will shorten the period of your loan and save enormously on interest over the life of the loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
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