There's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make extra payments which apply toward the principal. Borrowers can pay against principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making one extra mortgage payment per 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. Another popular option is to pay half of your payment every other week. The result is you will make one extra monthly payment in a year. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some borrowers just can't make extra payments. But you should remember that most mortgages allow you to make additional principal payments at any time. You can take advantage of this rule to pay extra on your principal when you get some extra money.
For example: a few years after moving into your home, you receive a huge tax refund,a large inheritance, or a cash gift; , you could pay this money toward your loan principal, resulting in significant savings and a shortened payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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