Save on Your Mortgage

Making consistent extra payments toward the principal balance can yield big savings. Borrowers can do this in various ways. For many people,Perhaps the simplest way to keep track is to make 1 extra payment per year. But some people can't pull off such a large additional payment, so splitting one extra payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

Some people just can't make any extra payments. Remember that virtually all mortgages will allow you to pay extra on your principal at any time. Whenever you get some extra money, consider using this rule to make a one-time additional payment toward your mortgage principal.

If, for example, you receive a very large gift or tax refund four years into your mortgage, investing a few thousand dollars into your home's principal can reduce the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge savings over the life of the loan.

Affinity Mortgage Brokers can walk you through the pitfalls of getting a mortgage. Give us a call at 719-331-6278.

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