Happy February everyone!! This is the second installment of twelve monthly blogs on financial information useful to buying or selling a home. This month’s Financial Corner topic is Should You Make Extra Payments on Your Mortgage. Hope it provides you with useful information.

Should You Make Extra Payments on Your Mortgage?

There are definitely benefits to making extra payments on your mortgage, especially since savings rates for money market and savings accounts are historically low these days. Here are

 Save on Interest. Interest is calculated on your remaining loan balance, so paying additional principal payments early in the loan will greatly reduce the total amount of interest over the life of the loan.

 Emergency Fund. Do you have 4 to 6 months living expenses in savings that you can withdraw quickly if a family emergency arises? Without this financial cushion, you could lose your home and the additional payments you made to pay down the mortgage balance.

With today’s mortgage rates hovering around 4%, a mortgage is most likely the cheapest money you will borrow. If your finances are in good shape and you have extra money each month, then paying down your mortgage may be for you. But remember, there are more advantageous alternatives - such as maintaining a “rainy day” fund, paying down high interest debt, and fully funding your retirement account.