Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments which apply to the principal. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to keep track is to make 1 extra mortgage payment every year. But some folks won't be able to swing such an enormous extra expense, so splitting one additional payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every two weeks. Each option yields different results, 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 virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can benefit from this rule to pay extra on your principal when you get some extra money. If, for example, you receive a surprise windfall five years into your mortgage, you could apply this money toward your mortgage loan principal, which would result in huge savings and a shortened loan period. Unless the mortgage loan is quite large, even small amounts applied early can produce huge benefits over the duration of the loan.
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