Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments that are applied toward your loan principal. Borrowers accomplish this goal in a few ways. For many people,Perhaps the easiest way to keep track is to make 1 additional payment per year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The result is you make one additional monthly payment every year. Each option produces slightly different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. But you should remember that most mortgages will allow additional principal payments at any time. You can take advantage of this provision to pay extra on your principal when you get some extra money. If, for example, you were to receive a large gift or tax refund four years into your mortgage, you could apply a portion of this money toward your loan principal, resulting in huge savings and a shorter payback period. Unless the mortgage loan is quite large, even modest amounts applied early can produce huge savings over the life of the loan.
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