Save on Your Mortgage
There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments which are applied toward your loan principal. Borrowers accomplish this goal in a few ways. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment a year. But many folks won't be able to swing this huge extra expense, so dividing one additional payment into twelve extra monthly payments is a fine option too. Another option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment in a year. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. But remember that most mortgages will allow additional principal payments at any time. Whenever you get some extra money, you can use this provision to make an additional one-time payment on principal. For example: several years after buying your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, resulting in huge savings and a shortened loan period. Unless the mortgage loan is very large, even modest amounts applied early can yield huge savings over the life of the loan.