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sosajulie · Joined: 11 Nov 2009 Posts: 1 1.32 Dollars($)

We have a second mortgage on our new home that does not have to start being paid for 5 years. However, we are fully aware that the interest will be accumulating (I think). So, we opted to start making payments to the mortgage. Should we just be sending the amount equal to the accrual of the interest, or would it benefit us more to ask for that money to be put on the principal? Please let us know, it feels as though we've only reduced the loan by $4 in one whole year.

savior70 · Posted: Fri Nov 13, 2009 4:02 am Post subject:

Hi,

It'll be good if you can start paying down the principal, besides paying the interest on the mortgage. The more you pay towards the principal, the more you save on the interest payments in the long run. As you pay down the principal, the interest will be calculated on the reduced principal amount. If you can pay off the principal early, you will have to pay less amount of interest over the entire term of the loan.

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