Good advice, Phat. Even if you cannot add an extra amount as large as yours ($200/$550 = 36.36% more), simply paying 1/2 of the monthly mortgage payment every two weeks can reduce the term of a 30 year note down to about 21. By doing that, you actually make an extra monthly payment every year, and every time you can reduce principal it helps. For example, if mortgage payment is $1000 a month, you would pay $12,000 per year via traditional method, or $500 x 26 bi-weekly payments = $13,000 per year, with most of that extra $1000 per year going toward reduction of principal balance.
|