mortgage question

cookinfreak · ‎03-31-2010

Afternoon All!

I was just wondering about a house payment. Is it best to pay extra on the principle, the escrow or both?

TIA

cookin

redwingsgal · ‎03-10-2010

Personally, I always pay more on the principle, but it is your choice.

I may not agree with what you say, but I will defend, til death, your right to say it

Kachina624 · ‎03-10-2010

Definitely principle.

New Mexico☀️Land Of Enchantment

Lipstickdiva · ‎03-10-2010

Definitely the principle because in the long run you will pay less interest.

You are only allowed to have a certain amount of money in an escrow account. If your escrow account gets too high, the bank will refund the money to you. But I'm curious as to why you would want to put more into an escrow account?

gidgetgh · ‎03-09-2010

Principal because that lowers the amount you pay interest on.

Why is it, when I have a 50/50 guess at something, I'm always 100% wrong?

kaydee50 · ‎02-07-2011

@cookinfreak I'm assuming the "escrow" account is for paying taxes?? We pay our taxes directly so I'm confused as to why you would want to put extra money there??? Definitely put money toward the principle which will pay off the mortgage faster.

millieshops · ‎03-09-2010

@cookinfreak paying down the principal,is the only way you really gain financially. If you pay down the escrow and end up overpaying during the year, the extra will lower a bit what you have to pay next year, but that doesn't change the total amount you will,owe.

Pay on principal only and be sure to write on whatever you send with your mortgage that you are prepaying principal.

Goodie2shoes · ‎04-30-2012

From prior responses, it looks like you have your answer and I agree with the others

DrakesMomma · ‎06-02-2010

I agree, pay more to the principle. If we've had a local tax levy increase pass I will pay a little more to the escrow so we aren't hit with a big shortage bill at the end of the year.

patbz · ‎03-10-2010

Definitely principal; I always pay extra to "principal only" and usually I am quickly several years ahead on payments because the earlier in a mortgage you pay extra towards principal the more valuable it is. Google Mortgage Professor and see for yourself! Many years ago I worked as a S&L teller ( under employed in sunny San Diego) and really learned a lot about how principal and interest works ( has saved us well over $100,000 in interest over the years). Another important point is that if you are paying PMI cancel it as soon as you have enough equity to do so.