There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make additional payments which are applied toward your principal. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the simplest way to organize this process is to make 1 extra mortgage payment every year. However, some people will not be able to afford such an enormous additional expense, so dividing one extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay a half payment every two weeks. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay extra on your principal any time you come into extra money. If, for example, you receive a surprise windfall three years into your mortgage, investing several thousand dollars into your home's principal can significantly shorten the repayment period of your loan and save a huge amount on interest over the duration of the mortgage loan. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.
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