Reply to Paying Extra Principal on Mortgage

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Reply to "Paying Extra Principal on Mortgage"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]There is a difference between making a payment early and paying extra principal.  Making my December payment in September does NOTHING to reduce the interest I owe, it just gives the bank my payment early.  Making an extra principal payment reduces the loan balance, so reduces the amount of principal accruing on your loan.  OP is talking about the later.  The PP talking about effective mortgage rates may be confusing these two.[/quote]

some lenders you have to contact to tell extra should go towards principal, their default is to not do it.  Some require you contact each time, others let you make it a standing rule.  Mine does apply to principal automatically but I still check statement to make sure.[/quote]

This is very true.  Anyone has to be clear to their mortgage company whether they're making a payment or paying extra principal.  My mortgage company makes me choose either "monthly payment" or "extra principal" any time I make a payment, so it is easy for me to be clear each time.  (I also have my monthly payments on autopay so any time I log in to make a payment it is for extra principal).  It definitely may be more difficult depending on your mortgage lender.  I 100% agree with checking your statements each month.  Good reminder.[/quote]

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