Any homeowners here that are curious about how to pay off your mortgage? What’s your favorite tip?
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Here’s a simple trick I learned in banking: If you make one extra mortgage payment a year, on a 30 year mortgage you’d drop it down to 22-26 years, depending on your loan’s rate. On a 15 year note, it drops to 12-13 years. This can be accomplished by making half your payment every 2 weeks.
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AnnieB posted:
Here’s a simple trick I learned in banking: If you make one extra mortgage payment a year, on a 30 year mortgage you’d drop it down to 22-26 years, depending on your loan’s rate. On a 15 year note, it drops to 12-13 years. This can be accomplished by making half your payment every 2 weeks.
WOW - really great tip. Did you do this @annieb?
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No, but I know people who did. I’ve got credit cards to get rid of first.
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My fiancee puts any money leftover at the end of the month towards his mortgage, and he also budgets to pay extra on the principal monthly. It has shortened his mortgage from (I think) 20 years to 13.
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I have a coworker that does this. Right now my husband and I are behind a payment on our mortgage. My name is not on the loan so they won’t discuss business with me or I would call them and ask them if they could add a payment on to the end of the loan and begin paying it just as stated above. Or does anyone else have a better solution? My husband will not call them
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Keri Stringer Dunaway posted:
I have a coworker that does this. Right now my husband and I are behind a payment on our mortgage. My name is not on the loan so they won’t discuss business with me or I would call them and ask them if they could add a payment on to the end of the loan and begin paying it just as stated above. Or does anyone else have a better solution? My husband will not call them
My husband is like that too. He hates dealing with things over the phone. I call the number, explain who I am hand the phone to him to verify who he is and give permission to talk to me and then take back the phone. He gets annoyed even at this, but he will do it.
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Hubby and I bought last summer and signed up for biweekly payments because of the extra payment per year. Some sites I looked at said we’d finish the 30 year mortgage about 7 years early.
…But, after checking the statements the servicer was floating the half payments until it matched with the second payment to apply to the loan.
Since we only get paid once a month, not biweekly the payment option was not the most convenient for us, and since the interest is calculated daily having our payments posted near the end of the grace period, rather than paying in full at the beginning of the month just didn’t make sense.
After 10 months of biweekly we changed to paying monthly, and were able to pay two months of principal instead of a mortgage payment the month we switched.
We are no longer ahead a month but plan on putting any bonuses, raises, or other unexpected income in as an extra principal payment.
When my mother-in-law bought her house 40 years ago she was told each month you pay an extra principal amount (from amitorization(sp?) table) it cuts a payment off the end of the loan.
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Mathmommie posted:
Keri Stringer Dunaway posted:
I have a coworker that does this. Right now my husband and I are behind a payment on our mortgage. My name is not on the loan so they won’t discuss business with me or I would call them and ask them if they could add a payment on to the end of the loan and begin paying it just as stated above. Or does anyone else have a better solution? My husband will not call them
My husband is like that too. He hates dealing with things over the phone. I call the number, explain who I am hand the phone to him to verify who he is and give permission to talk to me and then take back the phone. He gets annoyed even at this, but he will do it.
I just say that I am Bob, or my partner. If you know all the verifying info, then they will talk with you. Yes, I know I don’t sound like a man, but it works.
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Instead of a biweekly payment, why not just add extra principal payments when doing your monthly payment? Put as much as you can every month on principal and you will be amazed.
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Just add extra money to your monthly payment, if you can afford an extra $25 to $100 a month, as an example apply it to reduce everything. If you get a bonus of any kind from employment apply it to the mortgage.
As for myself, I doubled my monthly payments just to get rid of it.
I may be in the minority here, but with super low interest rates I’m not interested in paying off my mortgage (at least not right now). The extra money I have that could go toward the mortgage payments instead goes toward investments earning 5-10% interest instead of paying down the mortgage at 3% interest.
At some point, probably when I near retirement, I would just make a lump sum payment to pay off the remaining mortgage with the proceeds from my investments over the years.
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