Save Big on your Mortgage Loan

Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments that go toward the principal. People use different methods to meet this goal. Making 1 additional payment once per year is perhaps the easiest to keep track of. However, some people won't be able to afford such a large additional expense, so dividing an 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 a little in reducing the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

Some borrowers just can't make any extra payments. But it's important to note that most mortgages allow you to make additional payments at any time. You can take advantage of this provision to pay down your mortgage principal any time you come into extra money.

If, for example, you were to receive a large gift or tax refund just a few years into your mortgage, paying several thousand dollars into your home's principal can significantly reduce the duration of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.

MortgageMax can walk you through the pitfalls of getting a mortgage. Give us a call: (303) 443-5566.