There's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments which go to your loan principal. Borrowers pay extra in a few different ways. For many people,Perhaps the easiest way to keep track is by making one extra payment every year. If you can't pay an additional 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 a half payment every two weeks. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some people just can't make extra payments. Keep in mind that most mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay down your principal when you get some extra money.
Here's an example: a few years after buying your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal can significantly reduce the repayment period of your loan and save a huge amount on mortgage 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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