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When they say if you make an extra mortgage payment you reduce your balance does that incl taxes & insurance?


e.g., if your mortgate is 747. then you add property taxes, and homeowners insurance making the payment 1242. do you pay the 1242 or the 747?

You need to read the mortgage papers you signed at the time of your mortgage loan. If you do not understand the terms and policy of making an "extra payment",you need to talk with an officer of the lending agency carrying your mortgage. All lending agencies do not have the same terms and policies.

Don't call the lending agency: you might get someone who unknowingly gives you incorrect information. Personally talk with a loan specialist at your lending agency. Get the policy in writing, signed by the officer you talk to.

Do not make an "extra" mortgage payment until you have written confirmation of the consequences.
only pay the $747 (extra payment). The rest of the money goes to an escrow account which is used to pay your taxes and insurance. This money has no effect on your mortage balance.

Of course, the more you pay the faster the balance reduces. So you could pay more if you can afford it. But $747 is considered the "extra payment".
NO they are just meaning your mortgage payments. You will always have insurance and taxes on your home even when it is paid off.
No...just on the principal amount.
Anything above the 1242 goes directly to the principal
Anything extra that you pay goes towards reducing the balance. So, in fact either amount. The more you pay the lower the balance gets the less interest you pay.
The more you pay the more you reduce your principal, and hence reduce the length of your note and the amount of interest you will ultimately pay.
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