There's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments which apply to the principal. People use different methods to accomplish this goal. Paying 1 extra payment once per year may be the simplest to arrange. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow you to make additional principal payments at any time. Any time you get some unexpected cash, you can use this rule to make an additional one-time payment toward your principal. Here's an example: a few years after buying your home, you receive a huge tax refund,a large inheritance, or a cash gift; , investing a few thousand dollars into your home's principal will reduce the repayment period of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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