There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that are applied toward your loan principal. People accomplish this goal in a few ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment every year. However, many people won't be able to afford such an enormous extra payment, so splitting an extra payment into twelve additional monthly payments is a great option too. Another option is to pay half of your payment every other week. The result is you will make one additional monthly payment every year. These options differ slightly in reducing the final payback amount and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some folks can't manage extra payments. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra cash, consider using this rule to pay an additional one-time payment toward your principal.
For example: a few years after buying your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could pay a portion of this money toward your mortgage loan principal, which would result in enormous savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
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