Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments that apply to the loan principal. Borrowers can accomplish this using a few different techniques. For many people,Perhaps the simplest way to keep track is by making one extra mortgage payment per year. But many people can't afford such an enormous extra expense, so splitting an extra payment into twelve additional monthly payments works as well. Another popular option is to pay half of your payment every two weeks. The result is you make one extra monthly payment in a year. Each option yields slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some people just can't make any extra payments. But remember that most mortgages will allow you to make additional payments at any time. You can take advantage of this rule to pay extra on your principal when you get some extra money.
Here's an example: several years after buying your home, you get a very large tax refund,a very large legacy, or a cash gift; , paying several thousand dollars into your home's principal can shorten the repayment duration of your loan and save a huge amount on interest over the life of the loan. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
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