I know that a large part of a mortgage payment goes toward the interest on the loan. So how much of what I owe on my house is interest and how much is principal? When I make my payment, it says I owe a certain amount in total. Is that the principal or the principal PLUS the interest? I'm just wondering because I read a couple articles lately that suggested that even paying an extra $100 on your monthly mortgage payment would pay off your house a lot quicker, however, I can't see that an extra $100 a month would make THAT much difference if the amount I see that I owe is all principal.
For instance, if I owe $200,000 on my loan and I pay say $1500 a month on my mortgage payment, adding another $100 a month is going to be about an extra $1200 a year. How is that going to result in any significant savings? Can someone explain this to me please? Thanks!
2007-12-01
05:28:18
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7 answers
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asked by
Emily Dew
7
in
Renting & Real Estate