There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make extra payments which go to the principal. Borrowers can pay against principal in various ways. Paying a single extra full payment once every year is probably the easiest to arrange. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment each year. Each of these options produces slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make any extra payments. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. You can take advantage of this provision to pay extra on your principal when you get some extra money. If, for example, you were to receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your home's principal can reduce the duration of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. For most loans, even this modest amount, paid early in the loan period, could offer big savings in interest and duration of the loan.
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