There's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make extra payments which are applied to the loan principal. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is to make 1 additional mortgage payment a year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment every year. Each of these options produces different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that most mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you get some extra money, consider using this provision to make an additional one-time payment toward mortgage principal. If, for example, you receive an unexpected windfall five years into your mortgage, you could pay this money toward your mortgage loan principal, which would result in significant savings and a shorter loan period. Unless the mortgage loan is very large, even small amounts applied early can produce huge savings over the life of the loan.
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