There's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which go to your principal. Borrowers can do this in various ways. Making a single additional payment once every year is likely the easiest to track. But many folks can't afford such a large additional payment, so splitting an additional payment into twelve extra monthly payments works as well. Another very popular option is to pay half of your payment every other week. The result is you make one additional monthly payment each year. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly shorten 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 mortgages will permit you to make additional payments to your principal at any time. Any time you get some extra cash, you can use this provision to pay an additional one-time payment on your mortgage principal. For example: a few years after moving into your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your home's principal can shorten the repayment period of your loan and save a huge amount on interest over the duration of the mortgage loan. For most loans, even a modest amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
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