Archive for the ‘bills’ tag
Mortgage Bank
when you pay extra principal should the bank reduce mortgage payments or period?
I paid some principal on my mortgage. The bank reduced my term not the mortgage payment. Koshi is this?
Extra payment of principal is a great way to reduce the principal balance outstanding on your mortgage. Reduced important not only reduces the time to pay down your mortgage, but more importantly, reduces the amount of interest you pay the bank. It is obviously kosher … prepayments apply directly to principal and the expectation is that you maintain the same fixed payment schedule. You can certainly ask the bank to change your payments if you wish, but if you can maintain your current payments, you will build equity faster. Here is a useful website to show you how much interest you will save and how your equity will build: http://www.banksite.com/calc/prepay Hope that helps!