Save Big on your Mortgage Loan

Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make additional payments which go to your principal. People make this happen in a few ways. Making a single additional payment once a year is likely the simplest to track. But many people will not be able to swing such an enormous extra expense, so splitting an additional payment into twelve additional monthly payments is a great option too. Finally, you can pay half of your mortgage payment every other week. These options differ a little in reducing the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.

Additional One-time payment

It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgages allow additional principal payments at any time. Any time you get some extra cash, you can use this provision to pay a one-time additional payment toward principal.

If, for example, you were to receive a large gift or tax refund four years into your mortgage, investing a few thousand dollars into your home's principal will reduce the repayment period of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even a modest amount, paid early enough in the loan period, could offer huge savings in interest and in the duration of the loan.

Front Range Lending can walk you through the pitfalls of getting a mortgage. Give us a call: 7202537070.