Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which go toward the principal. Borrowers can pay more on principal by employing various techniques. For many people,Perhaps the simplest way to organize this process is by making one additional payment per year. But some people won't be able to pull off such an enormous additional expense, so splitting a single extra payment into twelve additional monthly payments is a great option too. Another popular option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment every year. Each of these options produces slightly different results, but each will significantly reduce the duration 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. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal when you get some extra money. If, for example, you were to receive a surprise windfall just a few years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, which would result in significant savings and a shorter loan period. Unless the mortgage loan is very large, even small amounts applied early can produce huge savings over the life of the loan.
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