This means a portion of each payment you make pays the interest and the remaining portion goes towards your principal balance. This reduces the amount of interest you pay, which can significantly reduce your principal balance much faster. The rationale is that you don’t write checks against the mortgage payment amount. You can use it to help [...] Mortgage Saving Accounts If you have $3,000 in your mortgage savings account, then your interest is calculated as though your balance was $97,000. This way, the money will already be in the mortgage account.
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