Early Mortgage Payment
 

I'm self-employed and I get irregular paid - so some month much more then
others.
So I would like to pay in good month more money towards my mortgage (so like
make now a payment for Novemberthrough Febuary).
Can I do so and specially the question: do I save a bit in interest by that?

About my loan: I have a normal FHA Loan (7.5 %)

Thanks,
Pete

On Tue, 19 Oct 2004 17:27:26 GMT, someone wrote:


So I would like to pay in good month more money towards my mortgage (so like
make now a payment for Novemberthrough Febuary).


You can't just send in one check, it would merely get credited as
extra paid this month, and they would still expect the future months
payment. A normal mortgage is DIFFERENT FROM AN "INSTALLMENT LOAN"
like a car loan or many student loans.

What with contracted out payment processing, I am not optimistic about
this getting done right even if you call them first. I suggest
writing all the checks now while you have the money and subtracting
them from your check register, put each coupon & check in a separate
envelope, and put them aside, mail 'em out later one by one.

Or at least send separate checks with the separate coupons even if you
put 'em all in the same envelope, so that they can see what you are
doing!

-v.

"N" wrote...

If it makes more sense to pay monthly, then you could set up a bank
account with enough money to pay for each monthly payment for November
through February, and then arrange for the mortgage company to get
paid from that account automatically every month.

I've never done the above, I just figure it would work.

It will work just fine, as long as you remember to replenish the account. A
free checking account at a credit union that doesn't charge for automatic debits
would be ideal.

You don't even need a dedicated account, unless you want it to help enforce
financial discipline...


Another thought: Some people arrange to pay every 2 weeks, rather than
once a month. The advantage of this is that your checks are smaller
(which might help you in your situation) and that every year you'll
make 26 payments, instead of 12, and that means that every year you'll
pay more, thus paying off your mortgage faster.

That also has to be "approved" by the mortgage company, so you ensure the
payments are credited properly...