There's a trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments which are applied to the principal. You can accomplish this in various ways. For many people,Perhaps the simplest way to organize this process is by making 1 additional mortgage payment a year. But many people won't be able to pull off such an enormous extra payment, so splitting an extra payment into twelve extra monthly payments is a great option too. Another very popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment every year. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. But it's important to note that most mortgage contracts allow additional payments at any time. You can take advantage of this rule to pay down your principal when you get some extra money. If, for example, you were to receive an unexpected windfall four years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in huge savings and a shorter loan period. Unless the mortgage loan is very large, even small amounts applied early can produce huge benefits over the duration of the loan.
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