When Does It Make Sense to Make Extra Mortgage Payments
Making any extra mortgage payments on your mortgage allows you to get ahead on required monthly payments. Using this strategy, you are paying for the next month including the interest as prescribed by the terms of your loan. You can make as many payments as you like, keeping in mind that you are paying both principal and interest. Using this method, allows you to live “mortgage free” for a month or more. Once the calendar has caught up to your last payment, you will be required to resume your monthly payments as prescribed by the terms of your agreement.
- Making an extra mortgage payment has tax benefits. You can deduct the additional interest on your tax returns if the home is your primary residence.
- Increase the equity in your home faster. This may be a good strategy for anyone who is looking to use their home as an investment in their future.
- Decrease the length of your loan. Making additional payments will naturally decrease the life of the loan.
- Limits your on-hand cash resources. Tying up your money by prepaying your mortgage can you leave you cash poor with regard to daily expenses. Conduct a thorough budget review first.
- Examine your other outstanding debts. If you have credit card payments or school loans to pay off, your cash may be better used paying off those debts to help limit the interest charges in the future.
- Does not lower your monthly payments. You will be required to continue to make monthly payments as prescribed by the terms of your loan until the final payment.
Before you decide that it is time to get ahead on your loan payments, consult with a mortgage specialist. The experts at Texaslending.com can help determine the right path for you. 800-346-8047 https://www.texaslending.com/