Save on your Mortgage Loan
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Paying regular extra payments toward the loan principal will provide huge returns. Borrowers can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is to make one additional mortgage payment per year. If you can’t afford to pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment in a year. Each of these options yields different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. Keep in mind that virtually all mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you come into extra cash, you can use this rule to pay a one-time additional payment on mortgage principal.
For example: five years after buying your home, you get a very large tax refund,a very large legacy, or a non-taxable cash gift; , investing several thousand dollars into your home’s principal will shorten the repayment duration of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even this small amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.
The Rich Flanery Team can answer questions about these interest savings and many others. Call us at 970-577-9200.