There's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments that go toward the loan principal. People pay extra in several ways. For many people,Perhaps the easiest way to organize this process is by making one additional mortgage payment a year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for 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 option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. But you should remember that most mortgage contracts allow additional payments at any time. You can take advantage of this provision to pay down your principal any time you come into extra money. For example: five years after buying your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your home's principal can significantly reduce the period of your loan and save a huge amount on interest paid over the duration of the mortgage loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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