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 your loan principal. Borrowers can accomplish this using a few different techniques. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment a year. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Some people can't manage extra payments. Keep in mind that most mortgages will allow you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay down your mortgage principal any time you get some extra money. For example: a few years after moving into your home, you receive a very large tax refund,a large legacy, or a cash gift; , paying several thousand dollars into your home's principal can reduce the repayment duration of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even this relatively small amount, paid early in the loan period, could offer huge savings in interest and length of the loan.
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