Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments that go toward the principal. People use different methods to meet this goal. Making one additional payment once a year may be the simplest to arrange. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one additional monthly payment in a year. Each of these options yields different results, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Some people can't manage extra payments. Remember that virtually all mortgages will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra money, consider using this rule to pay an additional one-time payment toward your mortgage 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 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 life of the loan.
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