There's a trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments which are applied to the loan principal. Borrowers can do this in various ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra mortgage payment per year. However, many people will not be able to afford such an enormous additional expense, so splitting one additional payment into 12 additional monthly payments works as well. Finally, you can commit to paying a half payment every two weeks. Each of these options produces slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgages will permit you to make additional payments to your principal at any time. Whenever you get some extra cash, you can use this provision to make an additional one-time payment toward your principal.
Here's an example: five years after moving into your home, you get a huge tax refund,a very large inheritance, or a cash gift; , you could apply a portion of this windfall toward your loan principal, which would result in enormous savings and a shortened payback period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.
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