When you make additional payments, it is better to pay the mortgage or a mortgage?

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I guess it depends on the details of the loan office, but generally if you make additional payments, it is better, objective mortgage (30 years old. Fixed, 80% of the purchase price) or a home loan (15yr interest only about 20% of the purchase price) only to ensure that the issue is clear … What could be better (as far as the improvement in financial terms)? Apply the surcharge on the mortgage, or enforce additional home equity loans? If I can pay extra for one or the other.

  1. Reply
    May 16, 2011 at 2:55 am

    You have to indicate on the payment to apply towards the mortgage

  2. Reply
    May 16, 2011 at 3:30 am

    I would put the extra towards the home equity loan, usually a higher interest rate. By making your payments every two weeks instead of once a month this will shorten your mortgage to approx a 8-10 year loan instead of a 15 year, saving you tons of interest. If the bank does not allow you to make partial payments, just split your monthly payment in half and save this amount every two weeks, until your monthly statement arrives, then mail in the payment. The reason this cuts off so much interest is those few months that have 5 weeks and will cut years off the mortgage.
    Once the equity is paid off, do the same with your first mortgage.

  3. Reply
    irish girl
    May 16, 2011 at 3:39 am

    I think that if you go 30 yr. fixed with 20% down you’re getting into a more stable program (in case something comes up where you can’t make those high payments) and then whenever you have extra money you make an extra payment but make sure you tell them to “APPLY IT TO THE PRINCIPLE” that way it goes toward the original loan amount instead of going towards interest. This way you pay off your loan earlier and save yourself thousands in interest.

    But I am definitely not an expert, just some else who is going through all this lending BS

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