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Good morning. I have a question regarding the payoff of a mortgage.
Let's say that your bank gives you the option to make an online payment towards your mortgage every day from your checking account. You can pay as much as you like or as little as long as you pay the entire monthly amount by the due date. The monthly mortgage payment is $1500, so I would be applying $50 per day to the principal/interest total. The mortgage is a conventional twenty year payoff, opened in January 2007, and the interest rate is 5.875. BTW, the bank does not charge a fee for making a payment every day.
Is there any advantage (e.g. any interest savings or quicker principal payoff) gained if a mortgage is paid in the above scenario? Are the monies applied in this manner more apt to make the overall interest owed less because the principal is paid daily as opposed to a one time monthly payment? If not, which is the best way to bring down the principal owed? Is biweekly better?
Thanks.
Let's say that your bank gives you the option to make an online payment towards your mortgage every day from your checking account. You can pay as much as you like or as little as long as you pay the entire monthly amount by the due date. The monthly mortgage payment is $1500, so I would be applying $50 per day to the principal/interest total. The mortgage is a conventional twenty year payoff, opened in January 2007, and the interest rate is 5.875. BTW, the bank does not charge a fee for making a payment every day.
Is there any advantage (e.g. any interest savings or quicker principal payoff) gained if a mortgage is paid in the above scenario? Are the monies applied in this manner more apt to make the overall interest owed less because the principal is paid daily as opposed to a one time monthly payment? If not, which is the best way to bring down the principal owed? Is biweekly better?
Thanks.
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