Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments that are applied toward your loan principal. Borrowers can do this in several ways. Paying 1 extra full payment one time per year is probably the simplest to arrange. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another very popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment every year. Each option produces different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. But remember that most mortgages will allow additional payments at any time. You can benefit from this provision to pay extra on your mortgage principal when you get some extra money.
Here's an example: a few years after moving into your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , you could apply this money toward your mortgage loan principal, resulting in enormous savings and a shortened payback period. For most loans, even a relatively small amount, paid early in the mortgage, could offer huge savings in interest and in the length of the loan.
Do you have a question regarding a mortgage program?