Make Extra Payments & Pay Off Your Mortgage Faster

🏠 Make Extra Payments & Pay Off Your Mortgage Faster: Here’s How

Owning your home free and clear—it’s the dream, right? Whether you’re just a few years into your mortgage or halfway through, making extra payments can significantly shorten your loan term and reduce the amount of interest you pay over time. Let’s break down how it works and how to do it the smart way.

💡 Why Make Extra Mortgage Payments?

Your mortgage payment is made up of principal (the loan amount) and interest (the cost of borrowing). In the early years of your loan, most of your monthly payment goes toward interest. By making extra payments toward principal, you reduce the loan balance faster—meaning less interest accrues in the long run.

✅ Benefits of Extra Mortgage Payments

• Pay Off Your Home Sooner
  A 30-year mortgage can be shortened by several years just by adding a small amount each month toward principal.

• Save Thousands in Interest
  Depending on your loan size and interest rate, you could save tens of thousands in interest over the life of your loan.

• Build Equity Faster
  Every extra dollar paid increases your home equity—great if you’re planning to refinance, sell, or leverage your home in the future.

• Reduce Financial Stress
  Knowing you’re ahead on your mortgage can bring peace of mind—especially in uncertain times.

🧮 Examples of Extra Payment Strategies

Monthly Principal Add-On:
Add an extra $100 or more to each month’s mortgage payment, earmarked for principal only.

Bi-Weekly Payments:
Instead of paying once per month, make half a payment every two weeks. This results in one extra full payment per year—without feeling like a big change.

Annual Lump Sum:
Apply your tax refund or bonus toward your mortgage once a year to knock down your balance faster.

Round-Up Method:
If your payment is $1,432/month, round it up to $1,500 or $1,600—every little bit adds up.

🛑 A Few Things to Keep in Mind

• Mark it “Principal Only”:
  When making extra payments, be sure to instruct your mortgage servicer to apply it to principal only—not to future interest or escrow.

• No Prepayment Penalty:
  Confirm that your loan does not have a prepayment penalty (most loans today don’t).

• Stay Budget Conscious:
  Don’t overextend yourself. It’s great to pay off your loan early—but not at the expense of your emergency fund or retirement savings.

📍 Louisiana Homeowners: Want to See Your Payoff Plan?

If you're a Louisiana homeowner (or soon-to-be), Parish Lending can walk you through your specific mortgage payoff timeline and help you find ways to save without stress. Whether it’s rounding up your payment, switching to bi-weekly payments, or putting bonuses to good use, we can show you exactly how much you’ll save.