I have $400.00 extra each month to put toward my mortgage. Is it better to divide it up and make three separate additional principal payments during the month ($133.33 each time) or is better to pay the $400.00 additional principal all at once, each month when the mortgage payment comes due? (I am VERY disciplined, no need to worry that I won't do it faithfully.) I'm trying to reduce the interest as quickly as possible. Thanks in advance.
It's highly likely that your bank would not be able to apply a prepayment at a time different from the regular payment.
At the moment I make my payment, on 10/31, I have no accrued interest. So I pay down some principal. But If I randomly send money on 11/15, they won't apply it to the principal as it's less than the payment due.
Even if they did, it would make very little difference. Make one prepayment on the same payment ticket as the monthly mortgage payment.
If the interest would be calculated daily, it would be best to pay as soon as you have the money; the earlier the better.
However, the bank might or might not respect your earlier payments as such; you should contact them to find out if they will do so.
Also, make sure to mark extra payments as ‘principal only’, or they might just ‘put them aside’ until your next payment is due, and you would lose any advantage from it. Keep in mind that making an extra principal payment will not relieve you from paying the full normal rate when due.