Save on Your Mortgage

Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that go toward your loan principal. Borrowers can do this in several ways. Paying a single additional full payment once a year is probably the easiest to arrange. But some folks won't be able to pull off such a large additional payment, so splitting a single extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay a half payment every other week. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages allow additional payments at any time. You can benefit from this rule to pay down your principal when you get some extra money.

Here's an example: five years after buying your home, you receive a very large tax refund,a large inheritance, or a cash gift; you could pay a portion of this money toward your mortgage loan principal, resulting in significant savings and a shorter loan period. Unless the loan is quite large, even small amounts applied early can yield huge benefits over the life of the loan.

Stepping Stone Mortgage can walk you At Stepping Stone Mortgage, we answer questions about money-saving strategies almost every day. Give us a call: (541) 683-3300.

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