Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments which are applied to the loan principal. People employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is by making 1 extra mortgage payment every year. Of course, some folks will not be able to afford such an enormous extra expense, so splitting a single additional payment into 12 extra monthly payments is a great option too. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options yields slightly different results, but each will significantly shorten the duration 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. But it's important to note that most mortgages allow additional payments at any time. You can benefit from this rule to pay extra on your principal when you get some extra money.
Here's an example: five years after moving into your home, you receive a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply this money toward your loan principal, which would result in huge savings and a shorter payback period. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and in the duration of the loan.
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