Additional Principal Payments

Extra Payments Calculator

The Extra Payments Calculator is one of the best tools to use when you are considering buying a home or refinancing your current mortgage. Most people do not realize that a simple extra payment a few times per year can do a lot in terms of saving you money on your mortgage loan.

The fact is, most mortgage loans require you to pay down interest on the loan with each of your initial mortgage payments. This leaves the principle high and thus allowing higher interest charges. To save money, even thousands of dollars on your loan, make an extra payment.

One of the easiest ways to make an extra payment is simply to set up your payments to your lender to be automatically withdrawn and paid every two weeks. Although you are only required to make 12 payments per year, there are actually 26 pay periods per year. This means that you can easily make an extra payment without feeling the pinch.

Take a look at how much making an extra payment can help you. The Extra Payments Calculator is simple to use and requires only basic information.

• Fill in the amount of your loan, based on the amount you owe now, or will owe once you obtain the loan.
• List the interest rate you are paying, or the rate quoted to you by the lender.
• List the term of the loan. If you are already paying on a loan, enter the length of the loan at the time you obtained it.
• In the next section, list the date your mortgage began, if it is already in place. If not, use today's date.
• Finally, enter the amount of the additional payments you will make. If you are not sure about this, put in an estimated number.
• List the number of times per year you will make these payments. If you plan to pay a little extra monthly, use 12 times. If you plan to make two extra payments per year, list that, too.

Once you calculate this information, you will see some very interesting figures. You may be able to pay off your loan early by making those extra payments. In most cases, you will save a substantial amount of interest, even if you do not pay a lot of extra money with each payment.

The key to making this type of tool work for you is to ensure the lender applies any extra payments you make to the principle balance on the loan, rather than applying it to your interest. That is what helps you to pay off your loan sooner and for far less than what you owe on the loan. The Extra Payments Calculator is a simple tool that can really show you how easy it can be to pay off your loan sooner.