There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments which go toward the loan principal. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is by making one extra payment a year. However, some folks can't afford this huge additional payment, so splitting a single extra payment into 12 additional monthly payments is a great option too. Finally, you can pay half of your mortgage payment every other week. Each option yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Some people can't manage any extra payments. But you should remember that most mortgage contracts allow additional payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money. Here's an example: several years after buying your home, you get a huge tax refund,a very large inheritance, or a cash gift; , you could apply this money toward your mortgage loan principal, resulting in significant savings and a shortened payback period. For most loans, even this relatively modest amount, paid early in the loan period, could offer big savings in interest and length of the loan.
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