There's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments which apply toward the principal. Borrowers can pay extra on principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment a year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. Each of these options produces different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that most mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Any time you get some unexpected cash, consider using this rule to pay an additional one-time payment toward principal. For example: five years after buying your home, you receive a very large tax refund,a large legacy, or a cash gift; , paying several thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on interest over the duration of the mortgage loan. Unless the mortgage loan is quite large, even small amounts applied early can produce huge benefits over the life of the loan.
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