There's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments that go toward the loan principal. You pay against principal by employing various techniques. For many people,Perhaps the simplest way to organize this process is by making one extra mortgage payment a year. However, some folks won't be able to swing such a large additional payment, so dividing a single additional payment into twelve extra monthly payments works too. Another very popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. Each option yields different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgage contracts allow additional payments at any time. You can take advantage of this rule to pay extra on your principal any time you come into extra money. If, for example, you were to receive a large gift or tax refund five years into your mortgage, paying several thousand dollars into your mortgage principal can reduce the period of your loan and save a huge amount on mortgage interest over the life of the loan. Unless the mortgage loan is very large, even modest amounts applied early can produce huge savings over the duration of the loan.
Do you have a question regarding a mortgage program?