Timjoebillybob
Grandmaster
- Feb 27, 2009
- 9,418
- 149
I'm not sure I'm following. Anything above and beyond my minimum payment goes to remaining principal.
For example, my monthly payment is about $1300. I recently sent them a payment of $1700. so the first $1300 goes toward my normal principal and interest and escrow, and the extra $400 goes to principal only.
If you just send in extra it will be applied to the end of the loan aka $900 principle and $100 interest. If you specify what payment you want it to go to it can be the $100 principle/$900 interest payment.Which is why I tell new homeowners, that ANY extra payment helps.
ESPECIALLY at the beginning of the loan.
Granted, at the beginning of the loan, people usually have less extra to give.
But, if you were to take a $1000 payment..
at the beginning you might pay $100 principal and $900 interest.
So, if you paid $100 extra, it would all go to the principal, and it would be like you made 2 months payment.
But, if you paid $100 near the end, when a $1000 payment is $900 principal and $100 interest..
You only made 1/9th of an extra month payment.