There's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments which go to your loan principal. Borrowers accomplish this goal in several different ways. For many people,Perhaps the simplest way to organize this process is by making one extra payment a year. But some people will not be able to afford such an enormous additional payment, so dividing an additional payment into twelve additional monthly payments is a great option too. Another option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ slightly in lowering the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. Whenever you come into extra cash, consider using this provision to make an additional one-time payment toward mortgage principal.
If, for example, you were to receive a large gift or tax refund five years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly reduce the repayment period of your loan and save a huge amount on interest over the life of the mortgage loan. Unless the mortgage 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.
Do you have a question regarding a mortgage program?