Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments that go toward the loan principal. People make this happen in a few different ways. For many people,Perhaps the simplest way to keep track is by making one additional mortgage payment every year. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each option produces slightly different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some folks can't manage extra payments. Remember that most mortgages will allow you to pay extra on your principal at any time. You can take advantage of this provision to pay down your mortgage principal any time you get some extra money. For example: several years after moving into your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could pay a portion of this money toward your loan principal, which would result in huge savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can yield huge benefits over the life of the loan.
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