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If I got a 30 year fixed mortgage with a payment per month of $900 but paid $1200 per month with the second check for $300 marked "to be applied toward the principal" will my amounts due each month be lower and lower as I pay more towards the principal?
Do you get a monthly bill for your mortgage or do you get a book like you used to get with a car (maybe you still get a book with a car for all I know).
I'm no expert, but I don't think your monthly payments will change. Paying more towards the principal will just reduce the length of the mortgage (so less than 30 years in your case). I pay a few hundred extra here and there and my monthly payments have never changed. The only time they change is when my escrow balance changes (so when my taxes go up), then the amount goes up to reflect that.
My mortgage company sends a monthly bill now, but I plan to eliminate paper statements soon since I now pay online.
I do not believe that every mortgage contract is the same -- many lenders will make various provisions, some official, some just to keep a customer.
Some lenders will allow you to "re-amortize" your loan, but if they charge a fee for this or do not allow a re-amortization until certain conditions have been met (with regard to equity , length of loan, escrow) you can do the math yourself with online calculator. The difference is that the calculation you do, if not agreed to by your lender, will only show the hypothetical shortening till you are free-and-clear, and not really allow you to ever "short" your payment below the amount that is on your mortgage.
Realize too, that if your lender ever refuses to allow you to re-amortize AND rates / terms or better than what you signed up for, and you owe LESS than you would by only paying the agreed to amount, you will have MORE equity and that makes you a very desirable borrower. You could probably switch to a 20 year product after about 5 years or a 15 year product after about 9 and your would save even more as those typically have lower interest rates than a 30 year product...
If I got a 30 year fixed mortgage with a payment per month of $900 but paid $1200 per month with the second check for $300 marked "to be applied toward the principal" will my amounts due each month be lower and lower as I pay more towards the principal?
Do you get a monthly bill for your mortgage or do you get a book like you used to get with a car (maybe you still get a book with a car for all I know). Thanks.
-) Ask your lender if they send out monthly statements, so you have to write a check (probably no payment book).
-) BEFORE you get your loan make sure that there's "no penalty for prepayment".
-) Then, any amount that you pay in excess of your regular payment, will come off your loan.
-) Think about starting a HELOC Account - If your lender doesn't know what it is, and can't explain it to you clearly, go somewhere else for your mortgage.
-) As little as $3,000 per year extra can shorten your loan from 30 years to about 12 years - amazing but true!!!!!
-) PLEASE don't pay any attention to anyone who says that, paying off your mortgage early, is a mistake.
-) As you said, you'll be paying about $900/month - once you pay off your loan, that's an extra $900 in your pocker every month.
-) If a lot more people had paid off their loans in 10-12 years they might not have lost their home when they lost their jobs.
Post any other questions or send me a DM . .
Hope this helps . . . . .
If I got a 30 year fixed mortgage with a payment per month of $900 but paid $1200 per month with the second check for $300 marked "to be applied toward the principal" will my amounts due each month be lower and lower as I pay more towards the principal?
Do you get a monthly bill for your mortgage or do you get a book like you used to get with a car (maybe you still get a book with a car for all I know).
Thanks.
On a regular fixed mortgage, paying extra means that your loan is paid off sooner. Your payment stays the same (it will adjust slightly from year to year as taxes and insurance change, but the P & I stay the same).
I used to get a monthly bill, but since I set up my payment on autopay, now I just get a quarterly statement, and everything else is electronic, which I like.
Depending on your bank/lender, you may be able to get a discounted rate if you pay electronically automatically every month, and you may be able to set it up to pay an additional $xx for principal every month, I do that with Wells Fargo.
Finally, in addition to EZICIT's good advice, don't fall for any of those programs where you pay someone to show you how to pay your loan down faster. Most of them just tell you to pay half your mortgage every 2 weeks, thereby getting an extra payment a year in. Not only do some lenders not allow payment in this fashion, but you can pay off your mortgage early all by yourself by just making the equivalent of one extra payment each year (or whatever amount extra you can afford). Don't pay for that service.
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Principal - paying more towards mortgage
Paying your mortgage . . .
