There's a trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments that go to the principal. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to organize this process is by making one extra mortgage 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 pay that additional amount monthly. Another popular option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. Each of these options yields different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some people just can't make extra payments. But remember that most mortgage contracts will allow additional payments at any time. Whenever you come into unexpected cash, you can use this rule to make an additional one-time payment toward mortgage principal. For example: five years after moving into your home, you receive a larger than expected tax refund,a very large inheritance, or a cash gift; , investing several thousand dollars into your home's principal will significantly shorten the repayment period of your loan and save enormously on mortgage interest over the duration of the loan. Unless the loan is quite large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.
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