Do You Add Additional Principal To Your Mortgage?

Discussion in Mortgage & House Payments started by RaineyDay477 • Jul 13, 2015.

  1. RaineyDay477

    RaineyDay477New Member

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    When we first got a mortgage, I was in a bi-weekly payment plan that took half our monthly payment every 2 weeks. Essentially, we paid an extra payment every year of straight principal. When we refinanced though, I quit the program because we get essentially 2 extra paychecks a year, and it was nice having the extra money. But now I'm thinking that was a bad idea. Do you add extra principal to your payment?
     
  2. Pat

    PatWell-Known Member

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    Any time you can add money to the principal of your mortgage it is a good idea. Reducing your principal reduces the amount of interest you pay for renting the money you borrowed to purchase your home. The faster you can payoff the mortgage the lower the amount it is costing you.
     
  3. Jamille

    JamilleActive Member

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    I know the benefits of paying off extra for the principal and it can be a good way to reduce the interest payment and accelerate mortgage payment. However, I would caution against it if you don't have an emergency fund in place. I've seen people pay the principal in advance but lose their source of income after a few years and consequently lose their property to foreclosure. I would suggest that you build up an emergency fund first before making advance payment for the principal.
     
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