Save on Your Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments which go to the principal. Borrowers can pay more on principal in many different ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra mortgage payment per year. Of course, many people will not be able to swing such an enormous additional payment, so dividing a single extra payment into 12 additional monthly payments is a fine option too. Another option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment in a year. Each of these options produces slightly different results, 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 borrowers just can't make extra payments. But it's important to note that most mortgage contracts will allow you to make additional payments at any time. Whenever you come into extra cash, consider using this provision to make a one-time additional payment on mortgage principal.
If, for example, you were to receive a very large gift or tax refund just a few years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly shorten the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the duration of the loan.