Mortgage Savings

Paying consistent additional payments toward your loan principal provides singificant returns. Borrowers pay extra in several different ways. For many people,Perhaps the easiest way to organize this process is to make one extra payment every year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option yields different results, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.

Additional One-time payment

It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money.

If, for example, you receive a large gift or tax refund just a few years into your mortgage, paying several thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on interest paid over the life 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.

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