There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments which go toward the principal. Borrowers employ various techniques to accomplish this goal. Making 1 extra payment one time every year may be the simplest to track. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. Each option yields different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid 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 almost all mortgage contracts will permit you to make additional payments to your principal at any time. Whenever you come into unexpected cash, you can use this provision to pay an additional one-time payment on your principal. Here's an example: five years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , you could pay a portion of this windfall toward your mortgage loan principal, resulting in significant savings and a shortened loan period. For most loans, even this relatively small amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.
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