There's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments which go toward your loan principal. People use different methods to accomplish this goal. For many people,Perhaps the simplest way to organize this process is to make 1 additional payment a year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment each year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Remember that most mortgages will permit you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money.
Here's an example: several years after moving into your home, you get a huge tax refund,a large inheritance, or a cash gift; , investing several thousand dollars into your mortgage principal will significantly reduce the repayment period of your loan and save enormously on mortgage interest paid over the duration of the loan. Unless the mortgage loan is very large, even small amounts applied early in the loan period can yield huge savings over the duration of the loan.
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