should I make advance payments on new mortgage loan.?

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This is a new home loan if I pay advance payments will these extra payments give me an increase in interest to deduct. I am looking into way to pay les taxes and at the same time have peace of mind knowing my mortgage is paid a few months in advance. dose this make senseSensehow far in advance can I pay.

3 Comments
  1. Reply
    I love my love
    May 3, 2011 at 4:28 am

    I think what you’re referring to is a principal only payment. if you send a payment to your mortgage company and designate they should apply 100% of it to the principal of your loan, this will decrease the amount of interest you pay over the life of the loan. I don’t think it will effect how much interest you are paying in the current tax year unless you’re sending a substantial amount to your mortgage co. to pay down the loan. check with whoever does your taxes.

  2. Reply
    charchar
    May 3, 2011 at 5:10 am

    Instead of making payments in advance do what is called excel payments. Send all the extra money you can and indicate this is to be applied to the principle.

    You can actually reduce a 30 year mortgage to a 20 year mortgage by doing this. You will have more equity in your home and save thousands of dollars in interest over the years.

    Ask someone with Mortgage Loan experience to prepare an amortization schedule showing $ 200.00 extra (or whatever amount you can afford) a month. It will be very clear that this is the best option.

  3. Reply
    David Z
    May 3, 2011 at 6:00 am

    no that is stupid. if you have extra cash make additional principal payments so you can pay loan off faster. add 1/12 to each payment and save a tone of money.

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