Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments which are applied toward your loan principal. Borrowers pay more on principal in various ways. Making 1 additional full payment one time every year is likely the easiest to arrange. But some people can't pull off such an enormous additional expense, so splitting one extra payment into 12 extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. Each option produces slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. Any time you get some unexpected cash, you can use this rule to pay an additional one-time payment on mortgage principal.
For example: a few years after buying your home, you receive a larger than expected tax refund,a large legacy, or a cash gift; , you could pay this money toward your loan principal, resulting in enormous savings and a shortened payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.
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