Big Interest Savings: Available to Anyone
Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments that are applied toward the loan principal. Borrowers can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make 1 extra mortgage payment every year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. These options differ slightly in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgage contracts allow you to make additional principal payments at any time. Any time you get some unexpected money, consider using this rule to pay a one-time additional payment on your principal. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal can reduce the period of your loan and save enormously on mortgage interest over the duration of the mortgage loan. Unless the mortgage loan is quite large, even modest amounts applied early in the loan period can yield huge benefits over the life of the loan.
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