There's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make extra payments which go toward your loan principal. Borrowers can accomplish this using a few different techniques. Paying one additional payment one time per year may be the simplest to keep track of. But many folks will not be able to swing such an enormous additional expense, so dividing a single additional payment into twelve extra monthly payments is a fine option too. Another popular option is to pay a half payment every other week. The effect here is that you will make one extra monthly payment each year. Each option yields different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some people just can't make any extra payments. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any time. You can take advantage of this provision to pay down your principal any time you get some extra money. Here's an example: a few years after moving into your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal will shorten the repayment duration of your loan and save enormously on mortgage interest over the duration of the mortgage loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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