How to Make an Extra Mortgage Payment Per Year
- 1). Choose a mortgage lender that offers different payment options. Ask about options for monthly, biweekly, accelerated biweekly, and weekly payments, and about any added fees for such options.
- 2). Choose a biweekly or accelerated biweekly option if you get paid every two weeks. By paying twice a month instead of once, you save on interest payments, because any extra amount you pay goes toward reducing the principal amount of the loan.
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You can pay off your home more quickly with extra payments.House image by Gon?¡ìalo Carreira from Fotolia.com
If you get paid on the 1st and the 3rd Fridays of every month, you have two pay periods a month. However, some months have more than four Fridays. If you pay your mortgage every second week on an accelerated plan, once or twice a year you will make an extra mortgage payment. If you pay weekly, this will happen as well. This is a great way to pay down a mortgage more quickly. Choose a lender that offers this option at no extra charge, if possible. - 4
Save a little extra every month to help cover those extra mortgage payments.piggy bank image by Jan Beltz from Fotolia.com
You may need to save money to be able to meet those extra mortgage payments. Make sure your bank account has enough extra money to cover one mortgage payment so you don't have to worry when that payment is deducted. Start a monthly savings program to create a buffer in your account. Calculate the value of your extra mortgage payments, and divide them over the course of 12 months to see how much you should save per month. Over the course of a year, saving $100 a month toward a bank buffer may help put your mind at ease about your extra mortgage payments.
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