There's a trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments which go toward your loan principal. Borrowers can do this using a few different techniques. For many people,Perhaps the simplest way to keep track is to make one additional payment every year. However, many folks will not be able to pull off such an enormous additional payment, so splitting one additional payment into 12 extra monthly payments works too. Finally, you can pay a half payment every two weeks. Each option yields different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. But you should remember that most mortgages will allow you to make additional payments at any time. Whenever you get some unexpected money, consider using this provision to pay a one-time additional payment toward your principal. If, for example, you receive a large gift or tax refund just a few years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in huge savings and a shorter loan period. For most loans, even a modest amount, paid early enough in the mortgage, could offer big savings in interest and in the length of the loan.
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