There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments which are applied to your loan principal. You pay against principal in many different ways. For many people,Perhaps the easiest way to organize this process is by making one additional mortgage payment a year. However, some people can't afford such an enormous extra payment, so dividing an extra payment into twelve extra monthly payments works too. Another very popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment every year. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Some people can't manage any extra payments. Keep in mind that almost all mortgages will permit you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay extra on your mortgage principal when you come into extra money. For example: a few years after buying your home, you receive a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , investing several thousand dollars into your home's principal can reduce the repayment duration of your loan and save enormously on mortgage interest over the life of the loan. For most loans, even a modest amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.
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