There's a trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments that are applied toward your principal. Borrowers can pay extra on principal in many different ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra payment a year. However, some folks will not be able to pull off such an enormous extra payment, so dividing a single additional payment into twelve extra monthly payments is a fine option too. Another very popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment each year. Each of these options yields slightly different results, but they will all significantly reduce 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. Remember that most mortgages will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your principal any time you come into extra money. For example: several years after moving into your home, you get a huge tax refund,a large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal can significantly reduce the period of your loan and save enormously on mortgage interest over the duration of the mortgage loan. Unless the loan is quite large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.
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