There's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments which apply toward the principal. People use different methods to accomplish this goal. Making one additional full payment one time every year is likely the simplest to track. If you can't afford to pay an additional whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment in a year. Each option yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will allow you to pay extra on your principal at any time. Whenever you get some unexpected money, you can use this rule to make an additional one-time payment on your mortgage principal.
If, for example, you receive a very large gift or tax refund four years into your mortgage, you could pay a portion of this money toward your loan principal, which would result in enormous savings and a shortened loan period. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.
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