Simple Ways to Save on Your Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments which are applied toward the principal. Borrowers employ various techniques to accomplish this goal. Paying a single additional payment once a year may be the easiest to arrange. However, many people will not be able to pull off this huge additional payment, so dividing a single extra payment into twelve extra monthly payments is a fine option too. Another very popular option is to pay a half payment every other week. The effect here is that you will make one extra monthly payment in a year. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Additional One-time payment
Some people can't manage extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. You can benefit from this provision to pay down your principal any time you get some extra money. If, for example, you receive a very large gift or tax refund four years into your mortgage, you could pay this money toward your loan principal, which would result in enormous savings and a shortened payback period. Unless the mortgage loan is very large, even small amounts applied early in the loan period can produce huge benefits over the life of the loan.
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