There'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 go toward your principal. Borrowers pay extra in a few ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra mortgage payment per year. But many folks won't be able to afford such a large additional expense, so dividing a single extra payment into 12 extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly shorten the length 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 most mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you get some extra money, you can use this provision to pay a one-time additional payment on your mortgage principal. Here's an example: a few years after moving into your home, you receive a huge tax refund,a very large legacy, or a non-taxable cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, which would result in significant savings and a shortened loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge benefits over the duration of the loan.
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