There's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which are applied toward the loan principal. Borrowers pay extra in several different ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra payment a year. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. Each of these options produces slightly different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
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. Whenever you come into extra money, consider using this rule to pay a one-time additional payment on mortgage principal. Here's an example: several years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal will shorten the period of your loan and save enormously on interest paid over the duration of the loan. Unless the loan is quite large, even small amounts applied early can yield huge savings over the life of the loan.
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