Making an extra payment on mortgage.

If you make an extra payment to your mortgage each year, do you send in just the amount the principal payment would be, or do you also send in what the escrow would be.

For example.

$2500 mortgage payment each month.
$1800 is principal and interest
$700 is Escrow

Do you send in an extra $2500, or do you send in just $1800 extra each year?

Re: Making an extra payment on mortgage.

We're able to put in whatever extra amount we want. We round our monthly payments up just a little. If you can do that, I would just send whatever you are comfortable with, whether it's $500, $2000, $5000, etc....

Re: Making an extra payment on mortgage.

technically an "extra" payment (to reduce the life of your mortgage) is just the principal plus interest (not the escrow amount for taxes/insurance).

However, you can send whatever you wish. We usually send in the full amount (with taxes and insurance).

Re: Making an extra payment on mortgage.

I'll clarify, I already send in an extra payment each year, and I was doing a full payment including taxes etc. I know the extra just helps the principal go down, but I was just wondering what other people meant when they said "send an extra payment in."

Thank you!

Re: Making an extra payment on mortgage.

I pay tax and homeowners myself, so when I pay extra I send a few hundred extra each month. In addition we send several thousand in during the year. Probably will add uP to 4 Payments this year

Re: Making an extra payment on mortgage.

Re: Making an extra payment on mortgage.

1800

Re: Making an extra payment on mortgage.

Yup, this is what DH does..he makes an extra payment by dividing the payment into 12 months. Eg, if the monthly payment is $ 1,800 - then divide it into 12 months ($150/month) and just pay an extra $ 150 every month...and that shortens a 30 year mortgage into 29, 28 and so forth..

Message edited 10/21/2011 5:22:06 PM.

Re: Making an extra payment on mortgage.

Posted by neener1211

Posted by maybesoon

I pay tax and homeowners myself, so when I pay extra I send a few hundred extra each month. In addition we send several thousand in during the year. Probably will add uP to 4 Payments this year

Annnd you just made me feel poor.

Re: Making an extra payment on mortgage.

We try to do two extra principal and interest payments a year.

Re: Making an extra payment on mortgage.

I just make sure it is applied to the principal. I send any amount I choose.

Re: Making an extra payment on mortgage.

depending on the month, i just add as much principle as we can afford. sometimes its $50, sometimes its a few hundred $.

Re: Making an extra payment on mortgage.

We just pay an extra payment equal to the amount of principal and interest each year.

If I had the money, I'd do more but, that's what works for us.