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Old 01-29-2016, 10:28 PM
 
Location: Too Far from Florida!
149 posts, read 307,639 times
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Was wondering what tips do you have for reducing payments on principal
Trying to help my family to reduce the monthly payments
I know situations are different but what worked for you?
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Old 01-29-2016, 10:30 PM
 
Location: Portland, OR
601 posts, read 539,234 times
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If your mortgage lender allows you, sign up to pay half your mortgage (or more, if you are able to) every two weeks, rather than one payment each month. You'll end up paying one additional payment a year, which will save you significant amounts in interest.
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Old 02-04-2016, 11:25 AM
 
1,067 posts, read 708,272 times
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First, a mortgage should be one of the last debts you go to pay off right now. Rates are so low and they are tax deductible. If you have any other debt get rid of that first then snowball that payment into paying down your mortgage.

I do a little trick where lets say I'm thinking about going out for pizza, but at the last second say "Naa lets stay in tonight" that's $20 I was going to spend but didn't. So I transfer that $20 to my savings account. Maybe I see a nice shirt in the mall I really want, but I put it down and say "I really don't need this" maybe its a $30 shirt, so I'll transfer $30 into my account. If I return something to homedepot that didn't really work out, I'll transfer that money to savings. And if I end up doing any odd jobs like helping to clean out neighbors gutters or maybe have a garage sale.. any extra income like that will go into the savings account. At the end of the month whatever is in the savings account above my 6 month emergency fund is additional debt paydown money.

I knew a girl (I DO NOT RECOMMEND THIS).. Who would open a zero interest credit card with like a $10k balance zero interest for 12 months. She'd max out the card to pay down the mortgage, boom $10k payment all at once, and it would mentally force her to put money on her card before the 12 months was up. It forced her to pay extra, and was saving her on the interest rate. It 100% works, but is extremely risky if life throws you a curve ball and just really not worth it.
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Old 02-04-2016, 11:34 AM
 
Location: USA
1,809 posts, read 2,142,039 times
Reputation: 4045
Each mortgage payment, I would add as much money as I could and mark it to be applied to the principal.


Paid a 30 year loan off in less than 13 years on a single person's salary -- in spite of rising taxes and homeowners insurance costs.
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Old 02-04-2016, 11:41 AM
 
Location: southwestern PA
20,426 posts, read 35,741,970 times
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Pay twice a month (as mentioned earlier) and pay extra when you have some money to throw their way.

It is a wonderful feeling to get the mortgage paid in full ahead of schedule!
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Old 02-04-2016, 12:14 PM
 
Location: San Antonio/Houston
33,603 posts, read 51,826,099 times
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Don't contact your lender, change or sign anything. Just make extra payments when you can, with a note "apply to principal".
You never know if you situation might change, so do not commit to anything in writing. That way you will be in charge how much and how often you make your extra payments. I did it myself and it worked great for me.
Make sure there is no penalty for paying off the house earlier.
http://www.consumerfinance.gov/askcf...age-early.html
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Old 02-04-2016, 12:21 PM
 
5,917 posts, read 4,061,917 times
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Quote:
Originally Posted by elnina View Post
Don't contact your lender, change or sign anything. Just make extra payments when you can, with a note "apply to principal".
You never know if you situation might change, so do not commit to anything in writing. That way you will be in charge how much and how often you make your extra payments. I did it myself and it worked great for me.
Make sure there is no penalty for paying off the house earlier.
Can I be charged a penalty for paying off my mortgage early? > Consumer Financial Protection Bureau
Agree completely. I think it's best to keep this totally optional, so it can happen or not depending on your circumstances. Have a Christmas bonus? Send it in. Water heater craps out? Don't pay extra. Etc.

Be prepared to keep track of your payments though, we found that lenders are terrible recordkeepers when it comes to tracking extra payments.
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Old 02-04-2016, 12:37 PM
 
1,390 posts, read 1,957,925 times
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Refi to a shorter term and lower interest rate.
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Old 02-04-2016, 02:12 PM
 
11,345 posts, read 5,858,212 times
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I bumped the "extra principal" number on my automatic monthly mortgage payment to as much as I could comfortably tolerate and just forgot about it. The same amount of money vanished from my checking account every month and I adjusted to living on what was left. If something unanticipated happens, you can always go online and change the number.
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Old 02-04-2016, 04:49 PM
 
Location: Mount Laurel
4,146 posts, read 8,389,779 times
Reputation: 3410
Quote:
Originally Posted by 4Florida2 View Post
Was wondering what tips do you have for reducing payments on principal
Trying to help my family to reduce the monthly payments
I know situations are different but what worked for you?

Maybe I am the only one reading this differently. I am under the impression that OP is looking to reduce the monthly mortgage payment. If that is the case, refinancing my help.


Is the monthly payment increasing because of other increasing cost (escrow) from the original loan or is there a reduction in income?
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