If I want to increase my home mortgage payment, do I need to refinance?

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Let’s say my Countrywide home loan term is 20yrs, $ 1000 a month with fixed interest rate 6.5%. What’s the bad/good if I decide to double my monthly payment?

5 Comments
  1. Reply
    Jade Leprechaun
    April 30, 2011 at 12:42 am

    some places have penalties if not go ahead and double pay it off sooner

  2. Reply
    Barry auh2o
    April 30, 2011 at 12:44 am

    Call them and ask if this is ok. It probably will be.
    There’s no need to refinance. Just be sure there isn’t a prepayment penalty.
    It’s always a good idea to get ahead on a loan. you’ll save a ton of interest.

  3. Reply
    john m
    April 30, 2011 at 1:03 am

    No need to refinance. The best way is to get a mortgage amortization chart for your loan. The lender can run one for you or you can get one from a financial publishing house , or you can probably run one off the internet. This will show you the amount of interest & the amount of principal in each payment & the balance after the payment is made. Then, just pay as many extra principal payments as you want each month. The interest beside each extra principal payment is the amount of interest you are saving by making that principal payment early. It is important to make sure that the lender knows that the extra money you send , is extra principal payments and not partial full payments, and that they can routinely handle these non scheduled principal payments. There should be a place on the bill or on the payment coupon to handle this.

  4. Reply
    Nate
    April 30, 2011 at 1:42 am

    what john m said is true but like the other guys said make sure with there is not early payment or payoff penalties. If there is find out how much. I’m sure it will still be better then all the interest your paying.

  5. Reply
    Mortgage Man
    April 30, 2011 at 2:01 am

    If you’re with Countrywide, you’re in a good position with 6.5%. On the wholesale broker side, I can tell you that Countrywide does not have a pre-payment penalty. Also, it would be worth refinancing and incurring more closing cost’s on your mortgage. 6.5% isn’t the best, but its pretty decent these days. I’m assuming you went through a “retail” branch of Countrywide instead of using a Mortgage Broker.

    copy and paste this website to your browser, and it will show you how much faster you’ll pay off a 20 yr mortgage if you double you’re payment:

    http://www.eloan.com/s/amortcalc?context=purch&sid=G1-MCgZPwV0VamaXA8YdEaYRl1U&user=&mcode=

    From your information you listed, I’m assuming you took your loan out for 134,125. If you double your payments and add $ 1,000 to the balance every month, you’ll go from a 20yr loan and have it paid off in 7 years!!!

    Also, Countrywide has a great program to help pay off your loan quicker. If you make a large payment toward the principle balance, they’ll reamortize your payments with the amount of years left and the new balance. Thus reducing your monthly payment. The is a small 400-500 fee to do this, but I believe they just add it onto the back of your loan.

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