Extra Payments Yield Huge Mortgage Savings

There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that are applied toward the principal. Borrowers pay extra in several different ways. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment every year. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment each year. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.

One-time Additional Payment

It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages will allow you to make additional principal payments at any time. Any time you come into extra cash, consider using this provision to pay a one-time additional payment on your mortgage principal.

For example: a few years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , you could apply a portion of this money toward your mortgage loan principal, which would result in enormous savings and a shortened payback period. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.

Stepping Stone Mortgage can walk you Stepping Stone Mortgage can answer questions about these interest savings and many others. Call us at 5416833300.