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 that are applied toward the loan principal. You can accomplish this in various ways. For many people,Perhaps the easiest way to keep track is by making one extra mortgage payment a year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option produces slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Some borrowers just can't make extra payments. Remember that almost all mortgages will permit you to pay extra on your principal at any time. You can benefit from this provision to pay down your mortgage principal any time you get some extra money. For example: five years after buying your home, you receive a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , you could pay a portion of this money toward your loan principal, resulting in enormous savings and a shortened loan period. For most loans, even this modest amount, paid early in the loan period, could offer huge savings in interest and length of the loan.
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