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Posted in Mortgage
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Question By
sekanstar

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2 People Helped
what is the best way to pay mortgage payment ?
Please help , I just bought a house and want to know if it would be better if I pay extra every month or just pay the amount and save the rest for later when refinance to pay off a big chunk ?

Thanks,

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Little payments make huge differences!

Helpful to 3 out of 3 people

Making additional payments on your monthly mortgage payment can shave years off of the end of your loan, especially early on.  Search for mortgage calculators that allow you amortize your payments with extra principal payments.  You'll be amazed how an extra $20 or $50 or $100 a month on a 30 year loan can shave off the years.

A 100k loan at 4.5% over 30 years has a Principal and Interest payment of $507/month.

360 payments of $507 = $182,520 in total payments

If you paid just $20 extra each month you'll pay it off in 27 years and 9 months (27 months early!)

333 payments of $527 = 175,491 in total payments...a savings of $7029!

If yoy paid $100 extra each month you'll pay it off in 21 years and 6 months (8.5 years early!)

258 payments of $607 = 156,606 in total payments...a savings of $25,914!

If you may yearly lump sum payoffs the effects will be similar, but not as good.

Good luck!

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Smart Payment plan

Call them, they might even be able to lower the interest payoff by few 1000.

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