Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments which apply toward your principal. Borrowers use different methods to meet this goal. Paying one extra full payment once a year may be the easiest to track. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment in a year. Each option produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that virtually all mortgages will allow you to make additional payments to your principal at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money. Here's an example: a few years after buying your home, you get a very large tax refund,a very large legacy, or a cash gift; , investing a few thousand dollars into your home's principal will significantly shorten the duration of your loan and save a huge amount on interest over the duration of the mortgage loan. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and length of the loan.
Do you have a question regarding a mortgage program?