Mortgage Savings Tips

Paying regular additional payments on the loan principal will provide big savings. You can accomplish this in various ways. Making one extra payment once per year is perhaps the easiest to track. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment in a year. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

Some folks can't manage any extra payments. Keep in mind that virtually all mortgage contracts will permit you to pay extra on your principal at any point during repayment. Whenever you come into unexpected cash, consider using this provision to make a one-time additional payment on your mortgage principal.

If, for example, you receive a large gift or tax refund four years into your mortgage, investing a few thousand dollars into your home's principal can significantly reduce the repayment duration of your loan and save enormously on interest over the life of the mortgage loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.

Stepping Stone Mortgage can walk you Stepping Stone Mortgage can answer questions about these interest savings and many others. Call us: (541) 683-3300.

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