Additional Payments Provide Huge Savings

There's a trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments that apply toward your principal. People accomplish this goal in a few ways. For many people,Perhaps the simplest way to organize this process is by making one extra payment every year. But some people will not be able to pull off such an enormous extra expense, so splitting a single additional payment into 12 additional monthly payments is a fine option too. Another very popular option is to pay a half payment every two weeks. The result is you will make one additional monthly payment every year. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.

Additional One-time payment

Some people can't manage extra payments. But remember that most mortgages will allow you to make additional payments at any time. Any time you come into unexpected money, you can use this provision to make an additional one-time payment on your mortgage principal. Here's an example: a few years after buying your home, you get a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , you could pay this windfall toward your loan principal, resulting in huge savings and a shortened payback period. For most loans, even this relatively small amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.

Front Range Lending can walk you the mortgage process. Give us a call: 7202537070.