There's a trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments which apply to your loan principal. People accomplish this goal in a few different ways. Making one extra full payment one time every year is probably the easiest to keep track of. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment every year. Each option produces different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgage contracts allow additional payments at any time. Any time you come into unexpected cash, consider using this rule to make a one-time additional payment toward your principal. For example: five years after moving into your home, you receive a very large tax refund,a very large inheritance, or a cash gift; , investing a few thousand dollars into your mortgage principal will significantly shorten the repayment duration of your loan and save a huge amount on interest paid over the duration of the loan. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge benefits over the duration of the loan.
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