Covington Mortgage Tips

If you make double house payments on your mortgage loan will you pay off the loan in half the time?

No, you'll pay it off in less than half the time. Here's why. If you make a double payment the 2nd payment goes 100% to reduce the principal balance of what you owe. So you are reducing principal at rapid rate.

Here's an example. Let's say you have a 30 year mortgage on a $120,000 house and your payment is $1,000 a month. If you are fortunate enough to be able to make double payments, your 2nd payment will reduce your principal by $1,000. After one year of this your principal is reduced by $12,000. After 10 years your principal would be reduced by $120,000 and your mortage is paid off!