When making a large payment can it be applied to principal only?

Yes.. if you specify it's to be applied to principal, but If you don't specify the overage is going to principal, then most lenders will automatically apply anything over your payment to principal unless there's a negative balance in your escrow account.. Then it would first go to your escrow shortage, and the remainder to principal.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

I would reccomend speaking with your current lender and asking them about a potential recast of the loan.

I would also talk to a mortgage broker or lender and have them analyze what your payment would be if you refinance to maybe a 15 year fixed rate. Of course this depends what your current rate is and what length of loan you have. If you do refinance you would want to do a no-cost loan so that you have a lender credit to pay for all of your closing costs. If you will have enough equity then you could have little to no adjustments for the rate and therefore you may be able to get a lower rate or a similar payment if you choose a lower term loan in regards to number of years. You mainly do not want to go backwards but forwards with your loan. So make sure you have a broker that can properly analyze it and do what is best for you.

Yes it can, just make sure you are very specific that it is to go to principal. Also, you should ask your current servicer how they want extra principal to be made. Some servicers like you to make two payments. One for your mortgage and a separate one designated for principal. Best wishes, Sean