Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments which apply toward your loan principal. People pay extra in a few different ways. For many people,Perhaps the easiest way to organize this process is to make 1 additional payment per year. But many folks will not be able to afford this huge extra expense, so splitting an additional payment into 12 extra monthly payments is a fine option too. Another popular option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment each year. Each of these options produces slightly different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage extra payments. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. You can benefit from this provision to pay extra on your mortgage principal when you get some extra money.
If, for example, you receive an unexpected windfall five years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a modest amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
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