There's a trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments which go toward your loan principal. Borrowers employ various techniques to meet this goal. For many people,Perhaps the simplest way to organize this process is by making one additional mortgage payment every year. Of course, many folks won't be able to afford this huge extra payment, so dividing a single additional payment into twelve extra monthly payments works as well. Finally, you can commit to paying a half payment every two weeks. These options differ slightly in lowering the final payback amount and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your principal any time you get some extra money. If, for example, you receive a large gift or tax refund five years into your mortgage, paying a few thousand dollars into your mortgage principal can reduce the duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.
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