There's a trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments which apply toward your loan principal. Borrowers use different methods to accomplish this goal. Paying 1 extra full payment once a year is likely the easiest to arrange. But many folks will not be able to pull off this huge extra expense, so dividing an extra payment into 12 extra monthly payments is a great option too. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in lowering the final payback amount and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some folks can't manage any extra payments. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any time. You can benefit from this rule to pay extra on your mortgage principal any time you get some extra money. If, for example, you were to receive an unexpected windfall five years into your mortgage, paying a few thousand dollars into your mortgage principal will shorten the duration of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.
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