How to Pay One Extra Mortgage Payment a Year
If your mortgage is the standard 30-year term, making even one extra payment a year will add up: It will shorten the term of the loan, and it will mean you'll pay less in overall interest. Mortgages other than the standard, 30-year fixed type will be affected in the same way. If you'd like to pay off your mortgage early, making one extra payment a year is the best way to begin.
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Instructions
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Decide how you would prefer to make the extra payment. You can pay in one lump sum, divide the total in half to make two payments, or divide the total by 12 and pay a portion each month to total one extra payment.
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Add the extra amount to your regular mortgage payment amount, double-checking your addition to avoid costly errors.
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Write the mortgage payment check for the total amount. On the payment coupon write: "Please apply extra balance to principal."
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Tips & Warnings
If you pay by automated check, log on to the mortgage holder's website, and make the payment or call the lender to authorize a check by phone.
If you pay in person, ask the teller to designate the extra to the loan principal.
Check with your lender to be sure your mortgage does not have a prepayment penalty clause.
