First Community Mortgage - Mortgage Saving Tips

One extra payment each year

Not sure if you are aware, but making one extra payment each year, will ultimately save money on interest. You can go about this in a few different ways. One option is to funnel any cash windfalls toward your principal balance. This can include tax refunds, bonuses, raises or other "found" money you come into throughout the year. Another approach is to divide your monthly mortgage payment by 12, then add this amount to your regular monthly bill. At the end of one year, you will have made an extra payment.

That may not feel like much, but an additional payment every year adds up over the long run.

Extra Payment Savings Potential

Loan Balance Monthly Payment Interest Rate APR Remaining Loan Term Total Interest Paid

$250,000 $1,256 3.75% 3.88% (e) 26 years $141,734

$250,000 $1,318 3.75% 3.85% (e) 24 years $129,517

*this is just an example**

If you added just one extra mortgage payment per year, you'd pay off your balance two years earlier—and save $12,217 in interest charges.

You can save money in a similar way by paying your mortgage every other week, as opposed to making one payment per month. Making biweekly mortgage payments adds up to one extra payment per year. Just keep in mind that you'll have to check with your mortgage servicer first to see if they'll allow you to structure your payments in this way.