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For those make extra mortgage payments, a question!

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MissJones
I need a nap!

Member since 5/05

22136 total posts

Name:

For those make extra mortgage payments, a question!

Which do you think is better? Making an extra payment every year or adding a little bit onto the principal every month?

For instance, let's say you had an extra $1000. Let's say your mortgage payment was $1000. Would you make a payment for $2000 or make the regular payment of $1000 and apply the other $1000 towards the principal? I'm thinking the latter is better.

ETA: What is the least amount you can add every month? Can I add another $30 a month to the principal?

Message edited 2/27/2006 6:11:19 PM.

Posted 2/27/06 6:09 PM
 
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DjPiLL

Member since 5/05

3664 total posts

Name:
Richard

Re: For those make extra mortgage payments, a question!

You make the payment of $2000 and note in the payment that the extra $1000 is to be added to the principal.

Posted 2/27/06 6:10 PM
 

oneday
<3

Member since 5/05

4319 total posts

Name:
Pam

Re: For those make extra mortgage payments, a question!

I'm not sure I'm understanding your question correctly but my payment stub has a place to write in if you want to add extra to the escrow, interest, or principle. I usually add in some extra each month and put it towards the principle.

Posted 2/27/06 6:28 PM
 

MrsRbk
<3 <3 <3 <3

Member since 1/06

19197 total posts

Name:
Michelle

Re: For those make extra mortgage payments, a question!

DH and I took out an interest only mortgage. DH's plan is to have the mortgage paid off fairly quickly (within 10 years).

Each month he puts an extra $1000 into the mortgage to help pay the principal down. He makes a notation on the payment stub so the mortgage company knows to apply it there.

Posted 2/27/06 6:32 PM
 

-Lisa-
---------------

Member since 5/05

6530 total posts

Name:
Lisa

Re: For those make extra mortgage payments, a question!

you can add any amount to your payment, there's no minimum. We rounded up to the next hundred for a nice even payment number - the extra is applied to the principal.

Posted 2/27/06 7:17 PM
 

BabyBoy
is Skylar Elizabeth

Member since 5/05

4189 total posts

Name:
Tom

Re: For those make extra mortgage payments, a question!

add a little bit each month knocks off more years then making an extra payment....

so lets say you want to make an extra payment a year..i would divide that by 12 and do it each month

you have to tell mortage company to apply X amount to principal, else you are just cutting in to your next payment.

what ever you can add to each payment to principal, you are saving thousands of dollors.

remember at first, your are paying majority of the intresest on your loan

Message edited 2/27/2006 7:24:44 PM.

Posted 2/27/06 7:22 PM
 

MissJones
I need a nap!

Member since 5/05

22136 total posts

Name:

Re: For those make extra mortgage payments, a question!

Thanks for your responses. I plan on making an extra contribution to the principal every month. I know that it will be just a little bit at a time, but I know that it will help over time.

Now, what is the difference between putting money towards equity versus putting money towards principal?

Posted 2/27/06 7:44 PM
 

CathyB

Member since 5/05

19403 total posts

Name:

Re: For those make extra mortgage payments, a question!

Just so everyone is clear, NYS law stipulates that any amount you send in addition to your monthly payment for any loan (mortgage, car, etc.) MUST be applied to principal. No need to note it on your payment.

So if you wanted to pay an additional $2000 per year, it doesn't really matter than much if you send it in one lump sum or monthly, except that if you sent it in a lump sum in January, the amount of interest you pay over the year will decrease slightly.

Posted 2/27/06 8:42 PM
 

MissJones
I need a nap!

Member since 5/05

22136 total posts

Name:

Re: For those make extra mortgage payments, a question!

Cool! Thanks for the info!Chat Icon

Posted 2/27/06 9:38 PM
 

BabyBoy
is Skylar Elizabeth

Member since 5/05

4189 total posts

Name:
Tom

Re: For those make extra mortgage payments, a question!

Posted by sarahsmommy

Just so everyone is clear, NYS law stipulates that any amount you send in addition to your monthly payment for any loan (mortgage, car, etc.) MUST be applied to principal. No need to note it on your payment.

So if you wanted to pay an additional $2000 per year, it doesn't really matter than much if you send it in one lump sum or monthly, except that if you sent it in a lump sum in January, the amount of interest you pay over the year will decrease slightly.



i don't know about that rule....maybe i should check. i did this with my car note and it didnt take off the principal. i had to tell them...and when i worked for Chase in payments, we never did such a thing unless customer told us to

Posted 2/28/06 9:42 AM
 

LisaW
Time for me to FLY!

Member since 5/05

13199 total posts

Name:
Did I ever tell you that I hate people?

Re: For those make extra mortgage payments, a question!

We pay extra every month and its always added to our principal.

Posted 2/28/06 9:54 AM
 

LIPrincess
Foxy Lady

Member since 6/05

1610 total posts

Name:
Jaimie

Re: For those make extra mortgage payments, a question!

We actually are making an extra payment a year. The bank offered us a deal, that they would debit our bank acct 1/2 payment every 2 weeks, hence making the extra payment a year towards principal. When the house is done being renovated I plan to increase this.

Message edited 2/28/2006 2:05:02 PM.

Posted 2/28/06 10:01 AM
 

CathyB

Member since 5/05

19403 total posts

Name:

Re: For those make extra mortgage payments, a question!

Posted by BabyBoy

Posted by sarahsmommy

Just so everyone is clear, NYS law stipulates that any amount you send in addition to your monthly payment for any loan (mortgage, car, etc.) MUST be applied to principal. No need to note it on your payment.

So if you wanted to pay an additional $2000 per year, it doesn't really matter than much if you send it in one lump sum or monthly, except that if you sent it in a lump sum in January, the amount of interest you pay over the year will decrease slightly.



i don't know about that rule....maybe i should check. i did this with my car note and it didnt take off the principal. i had to tell them...and when i worked for Chase in payments, we never did such a thing unless customer told us to



Well, legally they are supposed to. Sometimes banks that aren't headquartered in NY try to get away with it saying they don't know. Once with my car loan they did this and once I called up and said they had to by NYS law it was never an issue again. Maybe they noted it on my account or something. We've never had a problem with our mortgage when we send it extra money, it always comes off the principal and we have never told them one way or the other.

Posted 2/28/06 11:03 AM
 

DjPiLL

Member since 5/05

3664 total posts

Name:
Richard

Re: For those make extra mortgage payments, a question!

Posted by LIPrincess

We actually are making an extra payment a year. The bank offered us a deal, that they would debit our bank acct 1/2 payment every 2 weeks, hence making the extra payment a year towards principal. When the house is dont I plan to increase this.




I hope you didn't pay a fee to get this "deal".

Posted 2/28/06 11:20 AM
 

Tah-wee-ZAH
Kisses

Member since 5/05

15952 total posts

Name:

Re: For those make extra mortgage payments, a question!

We have a 30 year mortgage but pay extra principle each month so that it will be paid off in 15 years. Hopefully, we will be debt free for a few years before college tuition comes along.

Posted 2/28/06 11:45 AM
 

Laura1976

Member since 5/05

5754 total posts

Name:
Laura

Re: For those make extra mortgage payments, a question!

Posted by DjPiLL

Posted by LIPrincess

We actually are making an extra payment a year. The bank offered us a deal, that they would debit our bank acct 1/2 payment every 2 weeks, hence making the extra payment a year towards principal. When the house is dont I plan to increase this.




I hope you didn't pay a fee to get this "deal".




i just got something in the mail from ABN Ambro, saying we coudl do that for $295 one time fee.

Posted 2/28/06 12:34 PM
 

DjPiLL

Member since 5/05

3664 total posts

Name:
Richard

Re: For those make extra mortgage payments, a question!

Posted by Laura1976

i just got something in the mail from ABN Ambro, saying we coudl do that for $295 one time fee.




Waste, Waste, Waste of money. You are basically paying for a service that you can pretty much do on your own.

Adding extra money for principal on each mortgage payment will give you the same effect as any "bi-weekly" payment plan will give you.

Posted 2/28/06 12:39 PM
 

-DonnaMarie-
<3

Member since 5/05

6079 total posts

Name:

Re: For those make extra mortgage payments, a question!

I put as much extra towards the principle as I can, but thats usually only twice a year.

The rest of the time I do it by way of rounding up our monthly payment and that extra goes to the principal.

Posted 2/28/06 1:56 PM
 

LIPrincess
Foxy Lady

Member since 6/05

1610 total posts

Name:
Jaimie

Re: For those make extra mortgage payments, a question!

I got them to waive the 295 fee. I told them I wasnt going to pay it and asked for a supervisor, and got it waived.

Posted 2/28/06 2:06 PM
 

DjPiLL

Member since 5/05

3664 total posts

Name:
Richard

Re: For those make extra mortgage payments, a question!

Posted by LIPrincess

I got them to waive the 295 fee. I told them I wasnt going to pay it and asked for a supervisor, and got it waived.




Chat Icon Nice job!

All you have to say to them is "having the payments automatically deducted from my bank account benefits YOU... since you know you will get your money. Does NOT benefit ME. So now waive your totally BS fee or else I am not complying".


ETA: Did you just do this now?

Message edited 2/28/2006 2:13:52 PM.

Posted 2/28/06 2:13 PM
 

Laura1976

Member since 5/05

5754 total posts

Name:
Laura

Re: For those make extra mortgage payments, a question!

Posted by DjPiLL

Posted by Laura1976

i just got something in the mail from ABN Ambro, saying we coudl do that for $295 one time fee.




Waste, Waste, Waste of money. You are basically paying for a service that you can pretty much do on your own.

Adding extra money for principal on each mortgage payment will give you the same effect as any "bi-weekly" payment plan will give you.




not only do they charge the initial fee, but i think there is a montly $5 charge or something stupid

Posted 3/1/06 4:03 PM
 

dengal
Dad of Twins

Member since 5/05

1385 total posts

Name:
The 80's Man
Let's Go Mets!

Re: For those make extra mortgage payments, a question!

I pay a little extra towards the principal monthly.

Posted 3/1/06 4:04 PM
 

Eleanor
LIF Adult

Member since 2/06

2223 total posts

Name:
Ellie

Re: For those make extra mortgage payments, a question!

Posted by -Lisa-

you can add any amount to your payment, there's no minimum. We rounded up to the next hundred for a nice even payment number - the extra is applied to the principal.




I do this too. Always have for car loans, student loans, etc

Posted 3/2/06 4:43 PM
 

wowcoulditbe
wow, pic is already 1 yr old!!

Member since 1/06

6689 total posts

Name:
D

Re: For those make extra mortgage payments, a question!

we add a little more toward the principal each month too...it adds up pretty quick!

Posted 3/4/06 3:41 PM
 

MommyofG
just the girls

Member since 5/05

9461 total posts

Name:
Janice

Re: For those make extra mortgage payments, a question!

DH adds more every month to the principal

Posted 3/4/06 6:39 PM
 
 

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