Additional Payments Provide Big Mortgage Savings

There's a trick to reduce the repayment period of your mortgage and save you thousands in interest: Make additional payments which apply to your loan principal. People accomplish this goal in a few ways. For many people,Perhaps the simplest way to keep track is by making one extra mortgage payment a year. Of course, some people will not be able to afford this huge additional payment, so dividing one extra payment into twelve additional monthly payments works too. Finally, you can pay a half payment every two weeks. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.

One-time Additional Payment

Some borrowers can't manage extra payments. But you should remember that most mortgages will allow additional principal payments at any time. Whenever you come into unexpected money, you can use this provision to pay an additional one-time payment toward mortgage principal. If, for example, you receive a very large gift or tax refund three years into your mortgage, investing several thousand dollars into your mortgage principal can shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the mortgage loan. For most loans, even a modest amount, paid early in the mortgage, could offer big savings in interest and length of the loan.

Affinity Mortgage Brokers can walk you the mortgage process. Give us a call at 719-331-6278.

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