Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that are applied to the loan principal. People accomplish this goal in a few different ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment a year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment every year. Each option yields different results, but they will all significantly reduce 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. But it's important to note that most mortgages will allow additional principal payments at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you get some extra money.
Here's an example: several years after moving into your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , you could apply this windfall toward your mortgage loan principal, resulting in enormous savings and a shortened loan period. Unless the loan is very large, even small amounts applied early in the loan period can produce huge benefits over the duration of the loan.
Do you have a question regarding a mortgage program?