There's a trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments that go to your loan principal. Borrowers use different methods to accomplish this goal. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment per year. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The result is you make one additional monthly payment every year. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages allow you to make additional principal payments at any time. Any time you come into unexpected money, consider using this rule to make an additional one-time payment on your principal. For example: a few years after buying your home, you receive a very large tax refund,a large legacy, or a cash gift; , you could pay this money toward your mortgage loan principal, resulting in significant savings and a shorter payback period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can yield huge benefits over the duration of the loan.
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