There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make additional payments that are applied to your loan principal. Borrowers can pay extra on principal in various ways. Paying a single extra full payment one time a year is perhaps the simplest to track. However, many folks won't be able to afford such an enormous additional expense, so splitting one extra payment into twelve extra monthly payments is a fine option too. Another option is to pay a half payment every two weeks. The result is you will make one extra monthly payment every year. Each of these options produces different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. Remember that most mortgage contracts will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this provision to pay extra on your mortgage principal any time you come into extra money. If, for example, you were to receive a very large gift or tax refund five years into your mortgage, you could apply this money toward your loan principal, which would result in huge savings and a shortened payback period. Unless the mortgage loan is very large, even modest amounts applied early in the loan period can yield huge savings over the life of the loan.
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