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Is it a good strategy to pay extra principal per month or no? I have a $ 163,000 mortgage over 25 yrs at 5.5%. With property taxes and home insurance rolled in I am paying $ 1326 per month. I’m thinking $ 100 extra a month would be a good start to reducing the length of the loan? Any input will be appreciated…serious only please. Thanks!

7 Thoughts on Extra mortgage payments?
  1. Reply
    Michael B
    February 2, 2014 at 5:05 am

    Yes, I think it is a good idea to pay additional principle when possible. When you pay additional principle you are cutting down the interest you will pay over the life of the loan.

  2. Reply
    Wayne Z
    February 2, 2014 at 5:40 am

    In my opinion, it is a good idea.

    That is a guaranteed 5.5% return on your money. That is much better than any savings account is paying now.

  3. Reply
    Sam
    February 2, 2014 at 6:02 am

    Check list before doing this:
    -Make sure all your other loans are paid off in full.
    Including your car, student loans, credit cards.
    They are not tax deductible and they generally have a higher interest rate.

    – Make sure you have a solid 6 to 9 months worth of living expenses put away in a savings or a cd. No one should ever live without this.

    – Make sure you feel comfortable with what you are contributing to your 401K plan.

    Checklist complete? Then you can make extra payments whenever you have extra cash in your checking account. If you set yourself up a payment plan, you might find that sometimes (like chritmas), you won’t be able to contribute and stop the payment plan…

  4. Reply
    rswpbc
    February 2, 2014 at 6:14 am

    In reality its sending a red flag to your lender. That extra $ 100 does not go to principal only to interest so you are not reducing the length of the loan at all. It also tells the lender that you may come into financial hardship down the road. Once the lender has that in their head, two things could happen. One could be that they will want a balloon payment immediately or that they mark you for foreclosure in the future. Once that ball starts rolling it will be a headache for you later.

  5. Reply
    Katlady
    February 2, 2014 at 6:50 am

    A red flag? That sounds retarded. Everything I’ve ever learned says yes, pay extra. I mean look at the interest savings. Usually 100 bucks is the figure I’ve heard quoted cuz it’s enough to matter but not enough to strap you, but yes, pay off credit cards first.

  6. Reply
    Rebecca
    February 2, 2014 at 7:39 am

    rswpbc go away, go away you have prove your pure ignorance!

    And forget Judy’s/Sam’s check list. NO WHERE else will your dollars help yopu more than being able to reduce a 25 year loan by several years just in making an extra payment a year, which is about what you will be doing.

  7. Reply
    Classy Granny
    February 2, 2014 at 8:19 am

    Paying any amount extra on principle will shorten the time it takes to pay your mortgage.

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