There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that go toward the loan principal. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment per year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you make one extra monthly payment in a year. Each option yields different results, but each will significantly reduce 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. Keep in mind that most mortgage contracts will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay down your mortgage principal when you come into extra money.
If, for example, you receive a surprise windfall five 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. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can yield huge savings over the duration of the loan.
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