Mortgage payment ?

DH & I plan to make the extra mortgage payment each year to cut down our loan. We've decided to dedicate some of our tax refund to this annually. Now for the silly question - are we making one extra full payment (mortgage & taxes) or subtracting what our mortgage company adds each month to cover our tax bill? I'd imagine it's just the mortgage, but I want to be sure.
So, for example, if our monthly bill is $3K, and $500 of that is for taxes, are we just paying an extra $2500 on the principal a year?

Message edited 2/10/2007 9:56:34 AM.

Re: Mortgage payment ?

You can do either....make SURE, however, that you put on the check that it is an extra payment towards PRINCIPAL otherwise they can take part of it and throw it into your escrow account for taxes/insurance which won't help you pay off your mortgage early at all.

Re: Mortgage payment ?

The bank has to apply any extra money you send them to principal--although I do suggest as the last person did to write principal payment on it. Also they can't put extra money into your escrow unless your taxes or insurance goes up--by law they can only hold a certain amount of money in your escrow account.