There's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments which apply to your loan principal. Borrowers can pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making 1 additional payment every year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Whenever you come into unexpected money, you can use this provision to pay an additional one-time payment toward mortgage principal. For example: several years after buying your home, you receive a huge tax refund,a very large legacy, or a non-taxable cash gift; , you could apply this windfall toward your loan principal, which would result in significant savings and a shortened loan period. Unless the mortgage loan is quite large, even small amounts applied early can produce huge benefits over the duration of the loan.
Churchill Mortgage Company can walk you through the pitfalls of getting a mortgage. Call us: (703) 551-4107.