There'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 apply to the principal. You can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment per year. If you can't pay an extra 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 pay half of your mortgage payment every other week. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some people just can't make extra payments. But 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 come into extra money. For example: several years after moving into your home, you receive a larger than expected tax refund,a very large inheritance, or a cash gift; , paying several thousand dollars into your home's principal can significantly reduce the duration of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early can yield huge benefits over the life of the loan.
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