Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments that go to your principal. People pay extra in a few different ways. Making 1 additional full payment one time every year may be the simplest to track. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment in a year. These options differ a little in reducing the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Remember that almost all mortgages will allow you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money. If, for example, you were to receive a surprise windfall three years into your mortgage, paying a few thousand dollars into your home's principal will reduce the repayment period of your loan and save enormously on interest over the life of the loan. Unless the loan is quite large, even small amounts applied early in the loan period can produce huge benefits over the life of the loan.
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