| Is paying your mortgage getting you down? | | | | certain the payments are made separately. If you |
| Twenty-five years a long time to pay on a | | | | write a check for your usual commitment, write a |
| home? Would you like to pay your home off | | | | second check to be paid on the principal of the |
| early? Are you afraid of getting involved with | | | | loan. On the memo line on your extra check |
| agencies who are advertising that they can help | | | | actually write for `principal payment.' Now set up a |
| you? Settling this debt is easier then you think | | | | spread sheet on your computer, or I recommend |
| and you don't need to refinance or hire an | | | | you do it on paper and keep it filed at home. This |
| expensive agency to help you do it. But there are | | | | doesn't need to be fancy. Make 3 columns and |
| a few things you need to remember to do and | | | | head them, Principal Payment, Check Number and |
| keep track of. If you do this right, you'll be paying | | | | Date. Every time you make an extra payment, |
| your house off sooner then you're scheduled to. | | | | make a note on the spread sheet. You will need |
| Fifteen year mortgages have a lower interest | | | | to follow up and make certain that the extra |
| rate then twenty-five or thirty year mortgages. | | | | check did get deposited as a principal payment |
| That's just a fact. But when you got your loan, | | | | and not a payment toward the next month's |
| you were afraid you might not always be able to | | | | commitment. It is crucial that you understand how |
| make the bigger payment that the fifteen year | | | | the bank is using your second payment, and that |
| loan would involve? With taxes and insurance | | | | it goes on the principal. |
| going up each year, your payments will | | | | When you receive your bank payment summary |
| automatically be moving up with them, assuming | | | | for your taxes double check it. Make sure that |
| at least your taxes are held in an escrow account. | | | | your extra payments are there and clearly listed |
| If you are planning on selling your home and not | | | | as payment on your principal. |
| living in it long term, you are probably better off | | | | Before putting this plan into action, call your bank |
| to just continue your payments as you have | | | | and make sure there is no penalty for paying |
| been doing. The plan I am suggesting is not going | | | | your home off early. By putting forth this extra |
| to get your mortgage paid off in half the time, | | | | effort, you will be able to pay your home off |
| but it will shorten it depending on your financial | | | | earlier, continue to stay current on your original |
| commitment. The idea here is to pay down the | | | | payments, and when you cannot afford the extra |
| principal balance. This can be done at anytime | | | | payment you don't have any pressure on you, |
| during the life of the mortgage. It doesn't need to | | | | from the bank, to make it. |
| be done each month, but rather allows you to get | | | | Obviously making an extra or partial house |
| ahead during months when you have the extra | | | | payment each month requires discipline and |
| money. | | | | budgeting on your part. But keep the end in mind. |
| You will want to make your payment each month | | | | Your mortgaged home will become your home |
| as you always do, and then make a separate | | | | sooner. |
| payment on the principal. When you do this, make | | | | |