extra mortgage payments

is it better to make an extra mortage payment or pay a little more each month? we will have $ left over so i am thinking of doing this in order to pay off the mortage quicker and not have to pay so much interest. is this something worth doing? wwyd?

Re: extra mortgage payments

If you have the money to make an extra payment then you should do it. One extra payment per year will knock off about 7 years of your mortgage.

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Re: extra mortgage payments

Re: extra mortgage payments

Re: extra mortgage payments

we pay an extra amount each month to take several years off the length of the mortgage, at our current rate we should pay off the house in about 15 years

our broker did the math to keep the payments about the same throughout the mortgage, and currently we pay PMI also, but even after we hit the 20 % mark we will still pay the same amount extra that is where the extra years will come off

anything extra you can comfortably afford to pay will help significantly....just beware some banks charge a set up fee for this, so ask before so you can avoid any stupid fees

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Message edited 3/11/2010 2:20:15 PM.

Re: extra mortgage payments

Re: extra mortgage payments

with our bank, if we would do the biweekly payment plan, they will charge us a fee to set this up. It's like a couple of hundred dollars. So we have not done that.

Here is another question, if you pay your bills online through your bank, how do you make an extra payment then? Meaning the bank would not know that you want it to go to the principle or not. Does anyone know? Would I have to send that extra payment in by mail so the bank knows it's for the principle?

Thanks!

Re: extra mortgage payments

Posted by Pray4Baby2010

Posted by kokopelia

Posted by nraboni

If you have the money to make an extra payment then you should do it. One extra payment per year will knock off about 7 years of your mortgage.

I don't think it's one extra. I think its a few. From my understanding is depending on the weeks in the month, the only payment system to knock off some years is the biweekly payment. So... if some months have 5 weeks u will make three payments in that month... which are not full, they are half... so you figure we have 5 months with 5 weeks in it, that would be 2 and 1/2 extra payments ... boy I hope that makes sense lol

nope, its one extra payment per year

It has to do with reducing the interest off the life of the loan

Re: extra mortgage payments

Posted by JldDolphin

with our bank, if we would do the biweekly payment plan, they will charge us a fee to set this up. It's like a couple of hundred dollars. So we have not done that.

Here is another question, if you pay your bills online through your bank, how do you make an extra payment then? Meaning the bank would not know that you want it to go to the principle or not. Does anyone know? Would I have to send that extra payment in by mail so the bank knows it's for the principle?

Thanks!

Re: extra mortgage payments

Re: extra mortgage payments

Posted by Mici C

Posted by JldDolphin

with our bank, if we would do the biweekly payment plan, they will charge us a fee to set this up. It's like a couple of hundred dollars. So we have not done that.

Here is another question, if you pay your bills online through your bank, how do you make an extra payment then? Meaning the bank would not know that you want it to go to the principle or not. Does anyone know? Would I have to send that extra payment in by mail so the bank knows it's for the principle?

Thanks!

We pay our bills online too. We have TD Bank and they have the memo portion for when we make payments so we can write "Remainder to Principal" in it.

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I pay through my bank, and always round up to apply extra to the principal. I've never stated thats where it should go, but my statements always reflect the additional principal payment.

eta: I would not recommend making extra mortgage payments before paying off credit card bills and establishing a savings account with 6+months of expenses.

Message edited 3/11/2010 5:32:22 PM.

Re: extra mortgage payments

On our first mortgage payment dh read the bill wrong and paid the bill plus the late fee. On the next bill we saw we over paid and that the balance went toward the principal. We have been paying the 'late fee' ever since. We never wrote a memo but its still getting applied to the principal. I find it easier to give up a little extra each month than to give a extra payment. It's depressing to write that check once a month, I don't want to do it again.

Re: extra mortgage payments

Posted by JldDolphin

with our bank, if we would do the biweekly payment plan, they will charge us a fee to set this up. It's like a couple of hundred dollars. So we have not done that.

Here is another question, if you pay your bills online through your bank, how do you make an extra payment then? Meaning the bank would not know that you want it to go to the principle or not. Does anyone know? Would I have to send that extra payment in by mail so the bank knows it's for the principle?

Thanks!

Re: extra mortgage payments

Posted by JldDolphin

Posted by Mici C

Posted by JldDolphin

with our bank, if we would do the biweekly payment plan, they will charge us a fee to set this up. It's like a couple of hundred dollars. So we have not done that.

Here is another question, if you pay your bills online through your bank, how do you make an extra payment then? Meaning the bank would not know that you want it to go to the principle or not. Does anyone know? Would I have to send that extra payment in by mail so the bank knows it's for the principle?

Thanks!

We pay our bills online too. We have TD Bank and they have the memo portion for when we make payments so we can write "Remainder to Principal" in it.

Oh great. I'll look and see if ours has a memo area or not. I don't think it does, but maybe.

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We have been in our house a year and send a extra check every month marked for principal only and we have paid down 12,000.00 on the principal of the loan.

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Theres another system to cut your 30 yr into basically a 15 yr without really feeling it...

1st year pay the normal principle and interest

2nd year add 3% of that amt and add it to the priciple every month... so 3% of say $1000 is $30 so you'd pay 1030 every month for this year

3rd year add another 3% to 1030 payment so thats $30.90 so you'd pay 1060.90 for this entire year every month

And so on and so forth...

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Re: extra mortgage payments

Posted by philsdeezy

We have been in our house a year and send a extra check every month marked for principal only and we have paid down 12,000.00 on the principal of the loan.

Re: extra mortgage payments

We bought our house in 2002 and we pay extra every month. At our current rate we'll have the house paid of in 17 years instead of the original 30. I just had one of those "duh" moments today when I opend our mortgage statement too. We get it around the 10th and I generally pay it towards the end of the month when I pay a bunch of other bills. But I usually have the money available to pay it mid-month, so I figure if I pay it two weeks early every month over the next several years it's going to knock off even more interest. Sort of the same principal as paying in two payments, but I'll just pay the full amount early which should really help reduce that interest.

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Maybe I am doing this wrong but I put in an extra one monthly payment per year and I only went down 3 years. HOW do I go down 7 years??--

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The sooner you pay the money - the less interest you will earn in the long run - so if you have it now - pay it now (after CC debt, savings, retirement, etc)