There's a trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments which are applied toward your principal. Borrowers can accomplish this in several ways. Paying one extra full payment once every year may be the easiest to arrange. But some people won't be able to swing this huge extra expense, so splitting one additional payment into twelve extra monthly payments is a great option too. Finally, you can pay a half payment every two weeks. Each of these options produces 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. But remember that most mortgages allow additional payments at any time. Whenever you get some extra cash, you can use this provision to make an additional one-time payment on your mortgage principal. Here's an example: five years after buying your home, you receive a very large tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal can shorten the repayment period of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even this modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
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