Here'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 apply to your principal. Borrowers can do this using a few different techniques. For many people,Perhaps the simplest way to organize this process is by making one extra mortgage payment a year. If you can't afford to pay an additional whole payment in one month, you can divide your 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 result is you make one extra monthly payment in a year. Each option yields different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some folks just can't make extra payments. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any time. You can benefit from this provision to pay down your principal when you get some extra money. Here's an example: several years after buying your home, you receive a very large tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can reduce the duration of your loan and save a huge amount on interest over the duration of the loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the duration of the loan.
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