There's a 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 principal. Borrowers can do this using a few different techniques. Paying 1 extra payment one time every year is probably the simplest to arrange. If you can't afford to pay an extra whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment each year. These options differ a little in lowering the total interest paid and reducing payback length, 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 extra every month or even every year. But remember that most mortgages allow you to make additional payments at any time. Whenever you come into extra money, consider using this provision to make a one-time additional payment on your mortgage principal. Here's an example: several years after buying your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , you could apply this windfall toward your mortgage loan principal, resulting in significant savings and a shortened payback period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
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