Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments that go toward the principal. Borrowers pay against principal by employing various techniques. For many people,Perhaps the easiest way to keep track is by making 1 additional mortgage payment every year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ a little in reducing the total interest paid 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.
Some borrowers just can't make any extra payments. But it's important to note that most mortgage contracts will allow additional payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money. For example: a few years after moving into your home, you get a very large tax refund,a very large legacy, or a cash gift; , paying several thousand dollars into your home's principal will significantly shorten the duration of your loan and save a huge amount on mortgage interest over the duration of the mortgage loan. Unless the loan is very large, even small amounts applied early can yield huge benefits over the life of the loan.
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