Additional Payments Provide Huge Mortgage Savings

There's a trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments which go to your loan principal. You can pay more on principal by employing various techniques. Making a single additional payment once per year may be the easiest to track. However, some folks can't pull off such a large additional expense, so splitting a single extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay a half payment every two weeks. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.

Lump Sum Extra Payment

Some people can't manage extra payments. But it's important to note that most mortgages will allow additional payments at any time. Whenever you get some unexpected money, you can use this rule to make an additional one-time payment toward your principal.

If, for example, you were to receive an unexpected windfall five years into your mortgage, paying several thousand dollars into your home's principal can significantly reduce the repayment duration of your loan and save a huge amount on mortgage interest paid over the life of the loan. Unless the mortgage loan is very large, even modest amounts applied early in the loan period can yield huge benefits over the life of the loan.

Firelight Mortgage Consultants can walk you Firelight Mortgage Consultants can answer questions about these interest savings and many others. Call us: (303) 228-2254.

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