Paying forward on the Principle

I have this 3/2 home worth about 160K. My mortgage is $388 and I owe 70K at 4 1/2%
The principle is $124 So I’m paying $264 just in interest every month.
So I just made a principle payment above the mortgage for the 124 buks and I’m not sure how this works.
Does this eliminate the interest payment for next month or does it just take a month payment off of the end of the loan.
I can actually make a year of payments for about $1400 which I may start doing after closing some profitable deals.
Or use that money to purchase additional rentals or marketing.

Any body know how this works?

Whatever you pay above the monthly payment goes toward principle. Next months payment is due as normal, unless you’ve setup some sort of arrangement.

When’s that book coming out??!!??

Yea I know that next months payment is due, but does the next month payment exclude the interest and I wud only pay 124 buks as long as I’m a payment ahead?
I remember back in the 80’s there were programs being sold how to eliminate lots of ur interest by paying half ur mortgage payment every 2 weeks. Not sure how that worked also.

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Nope, your next payment is ammatorized normally. If you want to pay down the principle quicker, find an amatorization chart online, and find out how much in principle you’re paying every month. Add that amount to the mortgage payment and it’s essentially making a double payment. You’re doubling the principle payment.


I have seen the programs you are referring to. I have also noticed that the fine print on these programs says that the partial payment is not sent to the bank, since they would credit your mortgage balance until they receive the full amount. Instead, the partial amount is put in something like an escrow account where, once the full amount is collected, it is sent to the bank.

Bottom line is, the way you get ahead with such a program is that you make 26 half payments, which equal to 13 monthly payments, as opposed to 12. It is the same as if you paid one month extra at the end of the year. I think it is better to do it yourself by adding to the principle with every month’s mortgage.