How do I make an extra payment towards my mortgage loan?

Making extra payments toward your mortgage loan can help you pay it off faster and reduce the overall interest you pay. Here's how to make extra payments:

1. Contact Your Lender: Start by contacting your mortgage lender to understand their policies regarding extra payments. You should confirm that there are no prepayment penalties and that any extra payments will be applied to the principal balance of the loan.

2. Specify the Purpose: Clearly communicate to your lender that your extra payment is intended to be applied to the principal balance, not to future payments. This ensures that you're reducing the outstanding loan amount.

3. Choose the Payment Method:
Onetime Lump Sum: You can make a onetime extra payment toward your mortgage whenever you have the funds available. This can be done through your lender's online portal, by sending a check, or by visiting a local branch.
Biweekly Payments: Some borrowers opt for a biweekly payment schedule, which involves making half of your monthly mortgage payment every two weeks. Over the course of a year, this results in an extra full monthly payment, which can help you pay off your loan faster.
RoundUp Payments: Rounding up your regular monthly payment to the nearest hundred or another round figure is another way to make extra payments without significantly impacting your budget.

4. Specify the Extra Payment Amount: Clearly indicate the amount of the extra payment you want to make, and ensure it is above the regular monthly mortgage payment.

5. Check for Online Payment Options: Many lenders offer online portals where you can make extra payments and specify that they should be applied to the principal balance. This method is convenient and ensures accuracy.

6. Keep Records: Maintain records of all extra payments you make, including the date, amount, and confirmation from your lender. This documentation can be helpful for tracking your progress.

7. Consider Automated Payments: If you're committed to making extra payments regularly, you can set up automated transfers from your bank account to your mortgage lender. This ensures consistency in your extra payments.

8. Use Windfalls or Bonuses: Whenever you receive unexpected windfalls, tax refunds, work bonuses, or other lump sums of money, consider directing a portion of these funds toward your mortgage as extra payments.

9. Monitor Your Progress: Keep track of your mortgage balance and how much you've paid down over time. You can request an amortization schedule from your lender to see how extra payments impact your payoff timeline.

Remember that even small extra payments can make a significant difference in the long run. Before making extra payments, review your mortgage agreement, discuss your plans with your lender, and ensure that there are no penalties or restrictions on prepayments. By making consistent extra payments, you can reduce the time it takes to pay off your mortgage and save on interest costs.