mortgage

You bet it does BIG TIME.  This is how I did it years ago.  Haven’t had a mortgage in 20 years.  And as a bonus, as you pay down the principal faster, you build your equity faster.  This way, you also keep up with your mortgage balance sheet and your escrow account.  

To do it properly, you need an amortization schedule so that you and the mortgage holder end up with the same figures monthly.  You will make your mortgage payments on time, every month, just like usual.  You will allocate your mortgage payment as to how much goes where every month just like now - 

Columns will be:  

Month Year

Principal

Interest

Escrow -Insurance

Escrow - Taxes

EXTRA PRINCIPAL PAID

Ending Principal

Every month you will do the same and this should equal exactly what your mortgage holder is showing. 

• Interest on mortgages is assessed monthly on what you have outstanding in your principal - and any other charges that you haven’t paid off as they occur like any late charges or other assessed fees
• any escrow payments remain the same if you have them - like insurance and taxes - they have been figured on the amount of those items in the previous year + any shortages as well as a reserve that is outlined in your mortgage documents.  So these amounts do change from year to year, if you have them * , but not based on paying down your principal.
• Make sure that your mortgage does NOT have a prepayment clause - this is one problem that could stifle your efforts to pay your mortgage off faster - most don”t have such a clause
• You must be consistent in the added extra principal payments to your mortgage payments every month.  The more extra, the better, cause the faster the principal decreases, the less interest is calculated on the outstanding amount. You can do more or less because you are going to have a schedule that will keep up with this.
• Go to a mortgage calculator that also has an amortization schedule that you can print out.  I used BankRate.com - Mortgage calculator and amortization schedule   

You can actually make this in the current time without having to go back all the way to the beginning.  But you can, if you can and it is easier.  

To get it to the current day balance, principal and escrow, this may take a bit of back and forth in numbers to come up with your current principal and interest but once you get it done and print out the amortization schedule then it should all fall in line and your figures should match that of your mortgage holder going forward and your can also log in any extra principal payment that you make on a monthly basis - the same or different amounts.

What you will come up with is an amortization schedule by month - look at the amortization schedule on the Bankrate mortgage calculator site - they show it by year - you will be doing one by month and also showing how your regular mortgage payment is allocated with escrow, accounting for it.  You will also have an addition column showing any extra principal that you have made the month before. 

Don’t let the math upset you - like I said once you get the right figures and keep up with it monthly - it is easy and you will be so proud of yourself when you see that principal dropping.

If you need help developing it - you will have to supply some number info on your mortgage to develop it - like the amount of the mortgage when it began, term of mortgage, interest rate and when it started (1st payment due date), the amount of your mortgage payment and how much of it is for escrow if you have an escrow account.

*   a lot of people don’t know that if you pay down 20% or you pay down your mortgage to have less than 80% in principal to equity that you do not have to have an escrow account but that is only if you are disciplined enough to handle these payments on your own - taxes / insurance / whatever else.

Good Luck