There's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make additional payments which apply to your principal. Borrowers can do this using a few different techniques. For many people,Perhaps the easiest way to organize this process is by making 1 additional mortgage payment per year. However, many folks won't be able to swing such a large extra payment, so dividing a single extra payment into 12 additional monthly payments works as well. Another very popular option is to pay a half payment every other week. The result is you make one additional monthly payment each year. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Some folks just can't make extra payments. Remember that virtually all mortgage contracts will allow you to pay extra on your principal at any time. Any time you come into unexpected money, you can use this rule to pay an additional one-time payment toward your principal. If, for example, you were to receive an unexpected windfall five years into your mortgage, paying several thousand dollars into your mortgage principal will reduce the repayment duration of your loan and save a huge amount on interest paid over the duration of the loan. For most loans, even this relatively small amount, paid early in the mortgage, could offer big savings in interest and length of the loan.
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