Here's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments which are applied to your principal. Borrowers employ various techniques to meet this goal. For many people,Perhaps the simplest way to organize this process is by making one extra payment a year. If you can't afford to pay an extra whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment every year. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some folks just can't make extra payments. But remember that most mortgages will allow you to make additional payments at any time. Whenever you get some unexpected money, consider using this rule to make a one-time additional payment toward your mortgage principal.
Here's an example: a few years after moving into your home, you receive a huge tax refund,a large legacy, or a cash gift; , you could pay this money toward your loan principal, resulting in significant savings and a shortened payback period. Unless the mortgage loan is very large, even small amounts applied early can yield huge savings over the life of the loan.
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