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I have a mortgage for 30 years, and thinking to shorten the years of payment. And I do not want to r

I have a mortgage for 30 years, and thinking of shorten the years of payment. And I do not want to refinance because I have to pay another finance charges. Friends told me I can pay double the principal or pay extra amount into principal payment will help me shorten the years of payment and also interests. Is that the smart way to do so?
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January 09 2011 - Tulsa
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Answers (9)

I would also add to Clay's and SoCal's the length of time you have had your current loan.The older it is, the more that's going toward principal. Which may off-set any gain with having a lower rate and starting all over again.

Happy funding, Rudi
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January 10 2011
Profile picture for Dunes....
John...Marketing Specialist?
Must be why ya came up with the Super Clever I'll post my Phone # here so it will show up there plan.....

So "Marketing Specialist"...Is that a Self-Declaration/Claim or one of those 2 Hour classes get a Designation Deals,,,,,,,,,,,

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January 10 2011
Consider, paying yourself the additional principle instead of paying it to the note servicer. Open a separate safe liquid account and make a payment to yourself each month. Commit to not touch the money.

This is safer for you in that you maintain control of the money. If you experience some emergency you will have access to the funds. If you put the money into your house it may not be there if you need it.

If the market were to be depressed at the time you want to sell, you may have lost the money.

If you do pay yourself the additional principle you will ultimately have the ability to pay off the mortgage early.
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January 10 2011
Please post more information or contact a trusted lender. Every situation is unique. 

While paying extra towards the principal will payoff the mortgage sooner, it may not necessarily be the best option. Refinancing into a lower term and lower interest rate may prove to be a better option. This however can only be determined by having all the facts in front of us. As Clay mentioned below we would need all that information in order to give you more sound advice. 
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January 10 2011
Some lenders have the rebate program, which may offset the closing cost, if the new interest rate is lower than the old one then it is smart to refinance.
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January 10 2011
Every situation is unique and a refinance could help you achieve your goal faster the only additional piece of information that would be helpful is when your current mortgage was taken out.  How many payments have you made.
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January 10 2011
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@ Makanlaksa...

I'll back up what Clay just posted. I recently refi'd into a new 30yr fixed, all closing costs were covered and I lowered my monthly payment.

While paying extra principal is definitely a way to shorten your mortgage, don't discount looking into a refi as part of your plan.
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January 10 2011
In order to know all options please list the current interest rate, loan balance, estimated value, and estimated credit score. If your balance is high enough you can refinance without paying any closing costs AND pay additional principal on the new loan.
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January 10 2011
Yes, paying more than your set amount  is a  way of paying off your mortgage faster.

Make sure you designate the additional amount is to be credited towards your principal.

It was suggested to me that any additional  payments be made separately from your regular payment, Check with your bank or mortgage company to verify this, and to make sure you follow their procedure.
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January 10 2011
 
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