Extra Payments Provide Huge Mortgage Savings
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Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments that go toward the loan principal. Borrowers can accomplish this using a few different techniques. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment a year. But some folks will not be able to afford such a large extra payment, so splitting an additional payment into 12 extra monthly payments is a fine option too. Finally, you can pay a half payment every other week. Each option produces different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.
Additional One-time payment
Some people just can't make extra payments. But you should remember that most mortgages allow you to make additional principal payments at any time. Whenever you come into unexpected cash, consider using this provision to make an additional one-time payment on your mortgage principal.
If, for example, you receive a surprise windfall three years into your mortgage, you could pay this money toward your loan principal, resulting in huge savings and a shortened payback period. Unless the loan is quite large, even small amounts applied early can yield huge benefits over the life of the loan.