There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments which are applied to your loan principal. You can accomplish this in various ways. For many people,Perhaps the easiest way to keep track is by making 1 extra mortgage payment every year. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment every year. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people can't manage any extra payments. Remember that most mortgage contracts will permit you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your principal when you get some extra money. For example: five years after buying your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could pay this money toward your mortgage loan principal, which would result in significant savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.
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