Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments which apply to the principal. People employ various techniques to meet this goal. Paying a single extra full payment once every year is perhaps the simplest to arrange. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any point during repayment. Whenever you come into unexpected cash, you can use this provision to make an additional one-time payment toward your mortgage principal. If, for example, you were to receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save enormously on interest over the life of the mortgage loan. For most loans, even this modest amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
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