Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments which are applied toward the principal. Borrowers make this happen in a few ways. For many people,Perhaps the easiest way to keep track is by making one extra mortgage payment per year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each of these options yields slightly different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some folks can't manage extra payments. Keep in mind that virtually all mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money. Here's an example: several years after moving into your home, you get a huge tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save enormously on mortgage interest over the duration of the mortgage loan. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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