Save Big on your Mortgage
Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that are applied toward your loan principal. Borrowers pay extra on principal in various ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment per year. But some people will not be able to afford such an enormous additional expense, so splitting an additional payment into twelve additional monthly payments works too. Finally, you can commit to paying a half payment every other week. Each option produces slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Additional One-time payment
Some people can't manage any extra payments. Keep in mind that virtually all mortgages will allow you to pay extra on your principal at any time. You can take advantage of this rule to pay down your principal when you come into extra money.
Here's an example: five years after buying your home, you get a huge tax refund,a very large legacy, or a cash gift; , you could pay this money toward your mortgage loan principal, resulting in huge savings and a shorter payback period. For most loans, even a small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.