Save on your Mortgage Loan

Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments that apply toward your principal. Borrowers use different methods to meet this goal. Paying one extra full payment once every year may be the simplest to keep track of. However, many folks won't be able to pull off such a large additional expense, so dividing one additional payment into twelve additional monthly payments is a great option too. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment each year. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

It may not be possible for you to pay extra every month or even every year. But remember that most mortgage contracts will allow you to make additional principal payments at any time. Whenever you come into extra money, you can use this provision to make an additional one-time payment on principal. Here's an example: several years after moving into your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , you could apply this money toward your loan principal, which would result in huge savings and a shortened payback period. Unless the loan is very large, even modest amounts applied early can yield huge benefits over the duration 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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