Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which are applied toward your principal. Borrowers can do this in several ways. For many people,Perhaps the simplest way to organize this process is to make one additional payment every year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every other week. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some people just can't make any extra payments. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any time. You can benefit from this provision to pay extra on your principal when you get some extra money.
If, for example, you receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save a huge amount on interest over the duration of the loan. For most loans, even this small amount, paid early enough in the loan period, could offer big savings in interest and in the duration of the loan.
Do you have a question regarding a mortgage program?