There's a trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments that apply to your principal. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to keep track is by making 1 additional mortgage payment a year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each of these options yields different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Some people just can't make any extra payments. Keep in mind that most mortgages will allow you to make additional payments to your principal at any point during repayment. Any time you get some extra cash, consider using this rule to pay an additional one-time payment on principal. Here's an example: five years after moving into your home, you receive a larger than expected tax refund,a large inheritance, or a cash gift; , you could apply this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. Unless the loan is quite 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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