Hi. I have a question and I can't get anyone from Washington Mutual on the phone. I wanted to pay an extra mortgage payment once a year in December. Well I forgot on the first. Can I still make the payment now?? Anyone know?
DecBride04
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Re: Paying an Extra Mortgage Payment --Question
Oh course you can, just as long and you make sure you put down that you want that payment to be applied directly to your 'principle balance' I heard if you do this one a year, you can end up getting the mortgage payed off much sooner than the 30 yrs...
Niecey
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Re: Paying an Extra Mortgage Payment --Question
Yep - I am pretty sure you can. DH and I are pretty sure we are going to and haven't done it yet either!
Jeanene
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Re: Paying an Extra Mortgage Payment --Question
Yes you can. And actually if you have a 30 year mortgage and you pay an extra payment each year, you will pay off your loan in 22 years!
I'm almost positive that you can give the bank extra money at anytime you want...they will not refuse it...
even if you want to give them an extra $50 a month (as long as you write pay extra to principal)
Claud2001
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Re: Paying an Extra Mortgage Payment --Question
When we bought our house last year, the attorney mentioned this to us (re: the extra payment), however our accountant told us NOT to send the bank any more money than was necessary.
His reasoning basically was that once you are comfortable enough making your monthly mortgage payments and have money left over, you can re-fi to a fifteen year mortgage (often at a better rate) and still have your cash on hand for things life emergencies, home improvements, etc.
ss2002
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Re: Paying an Extra Mortgage Payment --Question
Good point, Claud. I never thought of that option!!
DeniseMang
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Re: Paying an Extra Mortgage Payment --Question
Yeah Claud but we got 5.75, if we re-fi will we ever see a better rate than that even on a 15 year mortgage????
Now I am more confused then ever. Is there anyone in the business of mortgages that can help me out and give me unbiased advice. Now the bank is telling me it is even better than paying one lump sum at the end of the year to pay that amount over 12 months (1/12 of the amount every month). Something about even less interest over the life of the loan.... Anyone know if this is true?
cooky11111
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Re: Paying an Extra Mortgage Payment --Question
The only thing with refinance is that you have to pay a heck of a whole lot of closing costs again. It also depends on the rate you got. We got 5.75% It would most likely never go 1.5 points lower. They say it is not worth refinancing unless you can go down 1.5 points. So for me the extra a payment or two a year we will get it paid off in 7-14 years sooner.
Denise it is true what the bank says...b/c you are gaining interest for the 11 months...the interest would be a smidgen lower each month if you split it up
DeniseMang
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Re: Paying an Extra Mortgage Payment --Question
Ok, thanks!
Lisa Rose
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Re: Paying an Extra Mortgage Payment --Question
we pay 1/12 extra each month for our mortgage.
Jenn P
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Re: Paying an Extra Mortgage Payment --Question
We do the same thing Lisa Rose does.
The idea to refi later and save the cash for now would make the most sense in a market with high interest rates. Anyone who bought within the past 1 ½ to 2 years is probably better off putting the extra towards the mortgage on whatever basis is comfortable for them because even 15 year mortgage rates will probably never go low enough to justify a refi.
YES i heard 1 extra payment a year takes 7 years off your mortgage (of the 30 year plan) but it has to be applied to the principal..
Diane
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Re: Paying an Extra Mortgage Payment --Question
We refinanced to a 15 year mortgage, 2 years ago, and just made an extra payment. If you have the $$$$ it is worth it.
VickiC
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Re: Paying an Extra Mortgage Payment --Question
You can also pay your mortgage twice a month (as in 1/2 in the beginning and 1/2 in the middle), and that will cut down on the time of the loan and save you money as well.
My sister does this, and the bank told her that by doing this she is saving on many years of interest, and a huge chunk of change that would have gone to the bank otherwise.
