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Old 01-27-2012, 08:34 PM   #1
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Is it true....mortgage question

My dad has said for ages that if you pay even a little extra on your mortgage, that it goes directly to the principal and pays it off much faster than that amount does in the actual mortgage amount. IE: every $25 in the payment has a cut taken for interest, whereas every $25 extra has no cut taken. Is this accurate??

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Old 01-27-2012, 08:40 PM   #2
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Any extra onto any loan goes towards the principle.
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Old 01-27-2012, 08:41 PM   #3
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Re: Is it true....mortgage question

Yes. We pay in extra each month (assuming we can). We try to do a few hundred a month. On the mortgage stub that we send in, it has a line for the actual payment and a line for additional principal. Its a good idea if you can afford it (if you can't like when we first got our house, forget it).
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Old 01-27-2012, 08:46 PM   #4
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Re: Is it true....mortgage question

My sister works at the bank and says that one extra payment a year can result in 10 years taken off your mortgage. I also write in the extra on the additional principal line when I go to pay. Once we get our credit cards paid off we intend on attacking the principal like crazy!
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Old 01-27-2012, 08:48 PM   #5
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I pay everything online through my bank, so since ive been sending in a little extra should i assume its going to the principle?
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Old 01-27-2012, 08:51 PM   #6
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Quote:
Originally Posted by Mom2Connor
I pay everything online through my bank, so since ive been sending in a little extra should i assume its going to the principle?
Yes.
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Old 01-27-2012, 08:53 PM   #7
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Re: Is it true....mortgage question

I would not automatically assume that it's going directly to principal, I would double check with your bank. It's SUPPOSED to go to principal, but they don't always do things the way they are supposed to. And, if you have any late fees or escrow shortage, they will usually apply extra towards that stuff first.
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Old 01-27-2012, 09:46 PM   #8
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Yeppers it is true. We pay an extra 600 a month on our mortgage. This will have out 25 year mortgage paid off in 14 years and save us 130k in interest. We are now FOUR years away from having no mortgage. We should have it paid off right around my 40th birthday

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Old 01-27-2012, 09:51 PM   #9
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Re: Is it true....mortgage question

Yes it's true; we don't have a mortgage (hopefully soon!!) but we did that with our car payment--we paid extra extra each month and it all went to principle.
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Old 01-27-2012, 09:57 PM   #10
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Actually I say four years but reality is, barring my husband not being able to work, it will be sooner than that. Every couple months I up the payment another $25 or $50 (so $50-$100 ish a month since we are on biweekly payments). He never notices and we are getting soooo close now. When you can see the end of that mortgage it is SO incredibly motivating.

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