Here's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make extra payments which go to your loan principal. Borrowers pay extra in several different ways. Making one extra payment one time a year may be the simplest to track. If you can't pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment in a year. Each of these options produces different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life 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 mortgages will allow you to make additional payments to your principal at any time. Whenever you come into unexpected cash, you can use this rule to pay a one-time additional payment on mortgage principal.
For example: a few years after moving into your home, you get a huge tax refund,a large legacy, or a cash gift; , investing a few thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge savings over the duration of the loan.
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