Here's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make extra payments that go toward the principal. Borrowers pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to organize this process is to make 1 additional mortgage payment every year. Of course, many folks won't be able to swing such a large extra expense, so splitting one additional payment into twelve extra monthly payments works as well. Finally, you can commit to paying a half payment every other week. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your principal any time you come into extra money. Here's an example: a few years after moving into your home, you receive a huge tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shortened loan period. Unless the mortgage loan is very large, even small amounts applied early can yield huge savings over the duration of the loan.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.