Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments which apply to the principal. Borrowers employ various techniques to accomplish this goal. Paying one additional payment one time every year is probably the easiest to keep track of. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Keep in mind that virtually all mortgage contracts will permit you to pay extra on your principal at any point during repayment. Any time you come into unexpected money, you can use this rule to pay a one-time additional payment on your principal. If, for example, you receive a surprise windfall four years into your mortgage, investing several thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is very large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.
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