Shadow419
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If you do make one extra payment a year it will knock off a few years of your mortgage, you are correct on that. Do you receive a "coupon" with your billing statement that has on there payment due, late fees, escrow, principal...etc, it should have blanks beside each of those where you fill in the amount you are paying? All you need to do is just write out another check (always do this on a seperate check) and make sure you write principal only on the check with your account number, on the coupon write this amount into the principal line. That way your statement coupon you send in with your check(s) should show your regular payment and then have it filled in on extra principal. If you don't do that they will apply this money to the interest and then you will be just doing this for nothing. If you don't have a statement coupon you send in with an area to add extra principal just contact your lender and they will let you know how to send it. I can't stress it enough.....make sure it's a seperate check and it clearly states for principal only. Also if you have an escrow for your taxes and insurance you will not need to include that whole amount, just the amount that only goes towards your principal and interest a month. |
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Q
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Yes, it can reduce your 30-yr mortgage by 5-7 years and significantly reduce your interest on the life of the loan.
I recommend that whatever amount the 13th payment is, make sure that you note on the payment that this needs to be applied to directly to principle only. You can make extra principle payments anytime when you have extra cash. |
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antho2820
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Just mark that 13 payment with the acc # and on the check or money order or the payment method ( To Points -principle and % only ) pays a house off in half the time . Also get rid of the Mortgage insurance . Take that difference and buy a term life insurance policy 30 year mortgage 30 year term and so on . Name the lender the beneficiary for amount owed and balance to go to secondary , YOU , The kids who ever. Either you house will soon be paid off or you will move either way the premiums you paid will benefit you.
Cash value or death benefit or when you buy a new home transfer it . ( Portable Mortgage insurance that benefits you)
Make sure your car insurance is right paying full coverage for a estamated replacement value if it is wrecked , crazzy |
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insightful
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write a seperate check and in the memo, write principal in the memo. This over the course of a 30 year note with $1000 payments allows you to pay an additional $30, 000 towards the principal over the life of the loan. Do the math and where it meets is how early you pay off the loan.
If you add to your monthly payment, you are paying add'l interest. |
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***you
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i would say you could pay as much as you want you can make 24 if you like. when you make that second payment on the memo just put principal on it |
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tinar92
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The best way to go about putting more money toward your principal is to make half of the mortgage payment every two weeks. This is how it works:
EXAMPLE: Monthly Payment $1400. x 12 months = $16,800.
Now break it down to $700 dollar every 2 weeks.
26 payments of $700 = 18,200
You have now put an extra $1400. toward your principal.
In most cases you have to call the bank and let them know that you are going to change payment methods.
Good Luck.
This will save thousands on your interest and knock a few years off of your mortgage. |
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baghmom
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Yes, I've heard that one extra payment per month can reduce a 30 yr to 15 yr. I dont know if that is correct-maybe someone w more knowledge will answer about that. However, to pay one extra payment a year, make out a separate check or however you pay, and write specifically "Pay to Principal Only". This will keep from confusion.
Not sure if making one lump extra payment (regarding the interest reduced by the payment) is more profitable for you than splitting up the amount of one extra payment by 12 and including that smaller amount in a separate check "Pay to Principal Only" every month. Seems 1/12th ea month would be less profitable (mathematically) then one lump. But no matter, doing what you can is best overall. I know it is hard to get another month payment in. Good for you! |
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luvmypups
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I add the extra amount per month onto my monthly check. For example, if your mortgage is $1000 monthly. I would divide that by 12 (for 12 months) or $83.333. Just for ease, I would round that up to $90 and pay $1090 per month. this pays one additional payment per year directly to interest. It's a great way to save interest and pay down your principal. |
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tire chick
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you need to make sure your mortgage company accepts extra principal & if the do then divide your monthly mortgage payment by 12 and send that amount in as extra principal with your regular payment. you will end up with a 13 payment & not even realize it. pay extra any time you can because it really does shave off time & money. mortgages are upfront loaded with interest & the first few years you are gaining very little principal. |
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Harry P
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There are two ways to accomplish this:
1. Send the 13th check to the bank or mortgage company anytime during the year and make sure that you indicate on the check that it is to be paid against PRINCIPAL only.
2. Arrange to pay your mortgage bi-weekly (i.e. pay half of the monthly payment every two weeks). That will amount to 26 bi-weekly payments in a year or equivalent to one extra monthly payment each year. I actually believe that this will pay off the mortgage even faster than the 13th payment at the end of the year.
Because making the extra payments will reduce the principal balance of your mortgage faster, the impact on annual interest payments is to reduce total annual interest paid.
So if you are thinking that the extra payment can be deducted on your taxes as mortgage interest that is incorrect. The additional payment will be considered payment of PRINCIPAL and payment of PRINCIPAL is not tax deductible.
Good luck. |
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roxiecat4200
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You can just add extra money every month to your principal or do it in one lump sum...or do it whenever you can. Any money that you pay on your principal is huge when it comes to how much you end up paying all together. |
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lil'mama
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Actually, it's just as good to just send an exra check with each payment for no certain amount and put on the check "for principal only" that will go straight towrads your principal and not toward interest. |
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