Save Big on your Mortgage Loan
Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which apply toward the loan principal. Borrowers can pay against principal by employing various techniques. Paying a single additional payment one time a year may be the easiest to arrange. Of course, some folks will not be able to afford such an enormous extra expense, so splitting an extra payment into twelve additional monthly payments is a fine option too. Another option is to pay half of your payment every other week. The result is you will make one additional monthly payment in a year. These options differ slightly in lowering the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
One-time Additional Payment
Some folks can't manage any extra payments. But remember that most mortgages will allow additional payments at any time. Any time you get some unexpected cash, consider using this provision to pay an additional one-time payment toward principal. For example: several years after moving into your home, you get a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , you could apply a portion of this windfall toward your loan principal, which would result in significant savings and a shortened payback period. Unless the loan is very large, even modest amounts applied early in the loan period can yield huge savings over the duration of the loan.