Scott Moize Jr.

Great Western Home Loans

  • Home
  • About
    • About Scott
    • Privacy Policy
    • Site Security
  • Resources
    • Calculators
    • First Time Home Buyer Tips
    • First Time Home Seller Tips
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage FAQ
    • Mortgage Glossary
  • Testimonials
    • Client
    • Agent
  • Blog
  • Apply
  • Contact

Overpay On Your Mortgage Or Add To Your Savings, This Is The Question

February 5, 2014 by Scott Moize Jr.

Overpay On Your Mortgage Or Add To Your Savings, This Is The QuestionSo you find yourself with a little bit of extra money – perhaps due to a raise, an inheritance or an unexpected windfall?

Should you put all of your money toward paying down the mortgage on your home? Or would you be better off placing your extra cash into a savings account?

Deciding whether to pay down your mortgage or add to your savings is a complex choice and it depends on a number of factors in your personal financial situation.

Here are some of the things that you will need to consider when making the decision:

How Much Are Your Savings Earning?

Take a look at the savings accounts where you are keeping your money and assess the interest that your savings are earning. Is your money earning more in savings than you would save by paying down your mortgage earlier?

Does Your Mortgage Have Overpayment Penalties?

Some mortgage lenders will charge you a fee if you try to repay your mortgage earlier than the agreed upon term. Check with your lender to find out and calculate whether the extra costs will outweigh the benefits you get from overpaying your mortgage. If they do, put your windfall in savings instead.

What are Your Other Debts?

It doesn’t make sense to be overpaying on your mortgage if you have a lot of credit card debt that is charging you an enormous amount in interest. Prioritize your high-interest debt first before you think about overpaying on your mortgage.

Do You Have An Emergency Fund?

You should always have an emergency fund in cash that will protect you from having to use expensive credit card debt if an unexpected payment comes up such as a burst pipe or a flat tire on your car or if you lose your job.

A good rule is to have the equivalent of three to six months of savings in a bank account just in case you need it. This is a first priority and only when you have this emergency fund established should you consider overpaying on your mortgage.

These are just a few of the important factors that you should consider when deciding whether to overpay the mortgage on your home or place the money in savings. For more information, contact your trusted mortgage professional.

Filed Under: Mortgage Tips Tagged With: Mortgage Tips,Homebuyer Tips,Overpaying For Mortgages

Scott Photo

Contact Scott


Mortgage Sales Manager

Call (214) 755-5307

NMLS #595311
Servicing Texas
Logo
CLICK TO APPLY →

Connect with Scott

Have a Question?

  • This field is for validation purposes and should be left unchanged.

Consumer Compliant & Recovery Fund Notice

CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.

Browse Articles by Category

Recent Articles

  • S&P Case-Shiller Home Price Indices: Home Prices Fall In November
  • Is It Worth It to Put More Than 20 Percent Down?
  • What You Need To Know About A Closed-End Second Mortgage
  • What’s Ahead For Mortgage Rates This Week – January 30, 2023
  • Getting A Mortgage When Self-Employed: What You Need To Know
Scott Moize - NMLS# 595311
First United Mortgage Group
NMLS #400025
This is not a commitment to make a loan. Loans are subject to borrower and property qualifications. Contact loan officer listed for an accurate, personalized quote. Interest rates and program guidelines are subject to change without notice.
First United Mortgage Group is an Equal Housing Lender.
EQL Logo
NMLS Consumer Access

Our Location


One Lincoln Park
8750 N. Central Expressway
Suite #930
Dallas TX, 75231

Copyright © 2023 · Powered by MySMARTblog