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 the loan principal. Borrowers pay extra in several ways. Making a single additional payment one time every year is perhaps the easiest to arrange. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each of these options produces slightly different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your mortgage principal any time you get some extra money.
Here's an example: several years after moving into your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , you could apply a portion of this money toward your mortgage loan principal, resulting in huge savings and a shorter loan period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the life of the loan.
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