Pre-paying your Mortgage  

Did you get solicited by your lender to pay half your monthly mortgage payment every two weeks? Various mortgage lenders are pushing loan pre-payment plans on homeowners that cost anywhere from $300 and $500 and claim to save consumers thousands in interest while paying off loans quicker.  
 
The truth is that you can create your own pre-payment plan FOR FREE, using one of the following methods:  
     

• Take the amount of your mortgage payment and divide that figure by 12. Add that figure each month with your regular payment and indicate on your check that the additional amount should be applied to the principal balance. For example, say your monthly payment is $1,200. Divide that number by 12, which gives you $100. So add $100 extra to your payment each month. And by the end of the year you will have made one additional payment on your mortgage. 
  
  
• Create your own amortization schedule and test different added amounts each month - $25, $50, $100. This lets you see how quickly your mortgage can be paid off by giving a specific amount of money each month. Two good mortgage calculator sites - hsh.com or bankrate.com - offer easy-to-use amoritization charts that let you follow how your lender will apply those extra payments.  

Writing a separate check for these methods is safer, but be sure to note principal prepayment either way.  
Also, check your statements regularly to make sure the extra amounts are credited properly.