Q: I refinanced my current mortgage in November 2001. The balance on the 15-year loan is $75,800, and the interest rate is 6.50 percent. I pay $667 per month, and pay the insurance and taxes separately.

When should I make an extra payment toward the principal? Does it matter whether I make a payment in January or December of a given year?

Also, if I make 2 extra payments a year beginning this year, how much will I save in interest and how much time will I shave off the life of the loan?

A: It doesn’t matter when you make your extra payment, whether it’s January or December, because your principal reduction will be credited when it’s received, not in the year received. So December is better only because it’s sooner.

As for figuring out how much you’ll save, your two payments will shave approximately 4 years off the payment of the loan, and you’ll save upwards of $40,000. You can calculate the savings yourself at a number of websites, including Homeowners.com, Money.com and E-loan.com.

Feb. 28, 2001.