Here's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments which are applied toward the principal. People use different methods to meet this goal. For many people,Perhaps the easiest way to organize this process is by making one additional payment every year. Of course, some folks won't be able to swing this huge extra expense, so splitting a single extra payment into 12 additional monthly payments works too. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment each year. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some borrowers just can't make extra payments. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any point during repayment. Any time you get some extra cash, consider using this provision to make an additional one-time payment on your principal.
For example: five years after moving into your home, you get a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal can significantly reduce the period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge savings over the life of the loan.
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