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For my home mortgage, If I get a bonus from work like $5000 and pay that to principal, will it lower the time or my monthly payment?

Let say I buy a house using home mortage and it is 30 years fixed. After 2 years, I get a big bonus from work (say $5000). If I pay that towards the principal of total loan (on top of monthly payments). Will that lower time frame (from 30 years to say 29.5 years) OR will it lower my monthly payment? thanks

13 Answers

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  • 7 months ago

    It will shorten the period/term of the loan. It will not lower your monthly payment because that is set in your contract.

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  • Eva
    Lv 5
    7 months ago

    It lowers the time frame. You still have to make the same payment.

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  • 7 months ago

    It will lower the time. It will not lower the payments,.

    Source(s): Mortgage lender 33 years.
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  • 7 months ago

    It will lower the amount of time you are required to pay it.  It will also mean that for 28 years you don't need to pay interest on about $5000 so it will also knock maybe 15k worth of interest off what you eventually end up paying.  The net effect of this is that the 30 year mortgage now gets paid off in maybe 27.5 years far less than the 30 years (and far less than 29.5 years, 30 year term minus 5k of payments on the end).

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  • Anonymous
    7 months ago

    It can do both things friend it will lower the amount of time that you have to make monthly payments but if you can get enough money paid toward the principal there comes a point where you can have the PMI insurance dropped! That's usually 20% of the home's original appraised value that you will have to have paid in. And once your PMI is removed that can drop your monthly payment quite a bit.

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  • Anonymous
    7 months ago

    It will reduce the amount of time. It will not lower the amount of future payments.

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  • Judy
    Lv 7
    7 months ago

    Will lower the time.

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  • Lolly
    Lv 7
    7 months ago

    Yes, it would shorten your mortgage payments. You can check out the numbers yourself:

    https://www.bankrate.com/calculators/mortgages/amo...

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  • Anonymous
    7 months ago

    Lowers the remaining time. not the payment amounts. And paying extra does not allow you to skip a month.

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  • 7 months ago

    It will lower he number of payments in the end. Will not lower monthly.

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