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Prepaying mortgage

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Valued Contributor

Prepaying mortgage

Inspired by Even more ways to lower your tax bill, I was looking into taking care of my upcoming monthly mortgage payment before new year rather than just after. The web site of my mortgage says:

Make a Payment
 -Make Regular Monthly Payment(s) or
 -Pay Other Amount Towards (principal or not)

Do you think that I can safely assume that “regular” means manually prepay and that my automatic arrangement of monthly payments will pick up on it?

 

Message 1 of 4
3 REPLIES 3
Moderator Emeritus

Re: Prepaying mortgage

Depends on the lender implementation, but I would assume your interpretation of manual prepay pushing back the automatic payment is correct.

 

That said the one you don't want to make is principal only if your goal is to get a larger tax deduction.  I may pull that trick with my mortgage next year, though in looking at it I did just do a somewhat silly mistake and paid the 4/17 property tax bill this evening when I had 5 months sans income and tuition deductions coming my way.  Wasn't really paying attention, foolish me.




        
Message 2 of 4
Valued Contributor

Re: Prepaying mortgage

It looks like I got it going, spoke with customer service on the phone. Pausing the autopay needed to be requested separately, at least a week ahead as it's too late once they have initiated the regular monthly contact with my bank. You're right that paying sooner than later puts a damper on your cash flow, but mind-boggling what can be done. Update: the morning after shows next autopay date of March on the mortgage website and the money for January and February withdrawn on my bank website.

Message 3 of 4
Moderator Emeritus

Re: Prepaying mortgage


@My-own-fico wrote:

It looks like I got it going. Suppressing the autopay needed to be requested separately, at least a week ahead. You're right that paying sooner than later puts a damper on your cash flow. I just happened to get some extra money a few months ago, so I am investing in deductions from the higher tax bracket this time around so to speak. I had earlier also applied the mentioned payment of spring property taxes before new year and stuffing my IRA as well. Mind-boggling what can be done.

 


Yeah, I really need to get better at optimizing this sort of thing so I appreciate the small boot to the tookus on this one as really the only things I'd done previously was just opportunitistically stuffed money into an IRA of some flavor to reduce my tax bill besides the usual 401k maximization.  Since I itemize anyway just from my state taxes alone, I should be playing these reindeer games of a tax variety too.

 

Thanks senor!




        
Message 4 of 4
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