There's a trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments that apply toward your principal. People make this happen in a few different ways. For many people,Perhaps the simplest way to keep track is by making 1 additional mortgage payment per year. If you can't pay an additional whole payment in one month, you can divide your payment by 12 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 make one additional monthly payment in a year. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some folks can't manage any extra payments. Remember that almost all mortgage contracts will allow you to pay extra on your principal at any time. You can benefit from this provision to pay down your mortgage principal any time you come into extra money. If, for example, you receive an unexpected windfall three years into your mortgage, paying a few thousand dollars into your home's principal can significantly reduce the repayment duration of your loan and save a huge amount on interest paid over the life of the loan. Unless the loan is very large, even modest amounts applied early in the loan period can produce huge savings over the life of the loan.
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