You need to indicate to the lender that you wnat overage applied to the balance otherwise they are simply going to apply it towards the next months payment.
That equates to making an ADDITIONAL principal payment. You will still owe the full of next month's payment. If your cash flow is limited, that will not work.
To address the OP's question, for example, if your P&I is $1000/month. There is no way you can rearrange (slice and dice into more than 12 payments) paying $12,000 total for the year and reduce the principal more than paying $1000/mo when due. Of course, if you pay $12,500 then your principal would be reduced some more — but that is only because you made that extra $500 payment. That is a problem if you don't have the extra $500.
