Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which are applied toward the loan principal. People use different methods to accomplish this goal. Paying a single extra full payment one time every year may be the simplest to arrange. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers can't manage any extra payments. Remember that most mortgages will allow you to pay extra on your principal at any time. Any time you come into extra money, consider using this provision to make an additional one-time payment toward mortgage principal. For example: several years after buying your home, you get a larger than expected tax refund,a large inheritance, or a cash gift; , you could pay this windfall toward your mortgage loan principal, resulting in huge savings and a shortened loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
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