Save on your Mortgage
There's a trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that go to your principal. You can pay against principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is by making 1 extra mortgage payment every year. But many people won't be able to afford this huge extra expense, so dividing an additional payment into 12 extra monthly payments is a great option too. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
One-time Additional Payment
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. Whenever you get some unexpected money, consider using this rule to pay a one-time additional payment on principal.
Here's an example: several years after moving into your home, you get a huge tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the repayment period of your loan and save enormously on mortgage interest over the duration of the loan. For most loans, even this small amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
