Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments which are applied to your loan principal. You can accomplish this in various ways. Paying a single additional payment once every year is probably the easiest to arrange. However, many people won't be able to afford this huge additional payment, so dividing a single additional payment into twelve extra monthly payments is a great option too. Another very popular option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment in a year. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. But you should remember that most mortgage contracts will allow additional principal payments at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you get some extra money. Here's an example: several years after moving into your home, you receive a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can reduce the repayment duration of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge benefits over the life of the loan.
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