Pre-pay Mortgage payments

Terry Says

I think you’re asking whether to pay down your mortgage balance because you have some “extra” money.  And I’m guessing you want to do that because you know the money might “burn a hole” in your pocket (ie get spent) if it is just sitting around!  There is no reason not to pre-pay a portion of your mortgage.  But you must contact your servicer and make sure that the check is made out separately from your monthly regular payment — and CLEARLY LABELED as a mortgage PRINCIPAL PAYMENT.  When this is done, then ask for them to give you a new statement showing the new, lower principal balance.

As an alternative, you could put the money in a one-year bank CD, or open a MM account in a different bank, so you would have this cash set aside in case of emergency– but not easily withdrawn and tempting you to spend!