Mortgage payment time rolls around all too quickly each month. It seems as if you just sealed the last envelop and placed a postage stamp on it from last month, and now it’s time to begin all over again. It’s time once again to write more checks, lick more envelopes, and dig out more stamps. The mortgage payment process for your loan gets very old after a while. But there are payment options to prevent so much hassle.
It is always extremely important, no matter what, to make your mortgage payment on time. Your mortgage payment should be the most important payment that you make each month. This one payment can greatly change the face of your credit report quite easily. Also, your home mortgage represents the largest savings account you will probably ever hold in your life. Never take the chance of skipping a “deposit” into that savings account by failing to make a mortgage payment.
There are several ways in which you might be able to avoid the monthly payment hassle of the mortgage payment cycle. Most standard mortgages requirement monthly payment; some mortgages are paid as often as bi-weekly (every two weeks). That’s a lot of payment checks to write! At least most mortgages include insurance and taxes into the mortgage payment – otherwise the stack of checks would be even higher!
To avoid the hassle of check writing, why not set your mortgage payment to become an automatic withdrawal from your bank? Makes sense, doesn’t it? No forgetting to write the check on time, no stamps, no hassle! More mortgage payments and other bills are being paid using electronic transfer of funds over the Internet. Not only is it safe if properly set up on a secure server with your bank, but it is almost instantaneous!
Another point to think about regarding your mortgage payment is exactly how the payment is applied to your loan. In most mortgage cases, your amortization chart will indicate that you pay off mostly the interest before you begin to pay off the principal. The principal, of course, is the amount of money that you borrowed for your mortgage. But the interest is the amount that is charged to you for borrowing that principal.
So what can you do to avoid paying so much interest? You can pay an amount over and above your monthly mortgage payment which is earmarked as “payment applied to loan principal”. Before you do this, check and be certain there are no penalties in your mortgage papers for early payments.
If you choose to make mortgage payments by automatic funds transfer from your bank to your mortgage holder, you will find a place on the initial set-up paperwork or online set-up form to include “instructions to payee”. You should be absolutely certain to include the loan number, the amount that is applied as your regular monthly mortgage payment, and the amount to be applied toward principal.
If you only make small payments toward principal in addition to your regular mortgage payment every month, you will be surprised what an impact it can have on the life of your loan! By paying as little as $20 or $25 per month toward mortgage principal when you send your monthly mortgage payment, you can shorten the life of your loan.
If you’d like more information regarding just how much savings electronic transfers can provide plus how much savings paying additional principal can provide, then review this useful information:
First, visit an online free mortgage calculator which allows you to include calculations regarding additional principal payments included in your monthly mortgage payment. Add the amount you anticipate adding toward principal into the calculator. You will learn the dollar savings over the remaining mortgage life of your home loan. Write that number down. Add to that figure 37 cents for each stamp, plus the cost of a book of check (estimated amount of checks you will use over the life of a mortgage). Add these figures up. This is your total dollar savings. Now, add 15 minutes for each month you will not have to write a check and multiply it by the number of monthly mortgage payments remaining. Convert that figure into hours. Now you know the saving in time – and that’s priceless!
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