Wed, 03/11/2009 - 11:36
(Offline)
We want to increase our monthly payments by $100 to bring down the principal on our house faster because we only have two years left to pay on it. If I were to send in our normal monthly payment plus the extra hundred, would they automatically apply that to the principal or do I need to specifically tell them that's what I want to do? Should I send it in a seperate payment? I want to wring every penny out of the extra I can. I checked the paperwork and there's no early payment penalty.
Sun, 04/05/2009 - 22:21
#2
(Offline)
Re: How does paying extra on your house payments work?
You could just include an extra $100 with your monthly payment and advise them to apply it to the principle. Another consideration is to fully pay off the balance now as your interest deduction is very little.
Several years ago I repaid my 15 year mortgage when it got to about the 7 year mark (1/2 way). It is great to not have a mortgage hanging over my head. My cash flow is now much easier to handle.
Thanks very much, micharch. I apologize for taking so long to get back to you. I forgot I'd posted it and thought I'd only thought about doing it LOL. I'm getting senile I think. ;)
First things first: next time, I'll spell principle correctly LOL. I hope I did in my letter I sent with the payment because I knew that was the right spelling. I must have had a brainstorm. They applied the extra no problem.
Secondly, I can only daydream about paying the whole thing off at once. I don't have the funds to do that, which is why we're doing what we can month to month. We've already agreed that any windfalls we get like a bonus will go towards the extra being sent in. We don't want to have a mortgage hanging over us either. No job's safe. We want to put in as much as we can to reduce that as fast as we can. It's not a lot extra to pay but better than nothing. We'll just keep chipping away at it every month.
©2009
You could just include an extra $100 with your monthly payment and advise them to apply it to the principle. Another consideration is to fully pay off the balance now as your interest deduction is very little.
Several years ago I repaid my 15 year mortgage when it got to about the 7 year mark (1/2 way). It is great to not have a mortgage hanging over my head. My cash flow is now much easier to handle.