Question:

Should I make an extra mortgage payment every once in a while?

Answer:

Every time you make an extra mortgage payment, you are helping your mortgage amortize faster and reducing the overall interest cost of the mortgage.

It is highly recommended that you make extra mortgage payments, if there is no prepayment penalty that your lender charges. Usually, you should be allowed to pay extra principal with your mortgage coupon.

Sending an extra 1/12th of the monthly mortgage each month or paying with a biweekly plan results in a very effective earlier amortization of the home loan, and shaves years off your mortgage term and tens of thousands of dollars in interest.

However, if you are planning on making extra mortgage payments on a regular basis, you will need to settle this with the lender. They might have requirements for a biweekly plan, or might require using a third party for the purpose. In any case, even if the lender charges a fee for accepting an early prepayment plan, you could set up an account where to put aside extra funds to be applied towards the mortgage payment. Thus, interest will accrue and will possibly offset lender's charges and penalty fees.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Why: Find your next home and save money.
Link: Search thousands of foreclosures. Free 7-day trial.
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage