U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
View Poll Results: Do you make extra principal payment?
Yes 18 58.06%
No 13 41.94%
Voters: 31. You may not vote on this poll

Reply Start New Thread
 
Old 03-18-2010, 09:50 AM
 
966 posts, read 3,234,682 times
Reputation: 340

Advertisements

In another thread, some implied making extra payment is not a good idea, which I disagree. So I'm curious about what my fellow CDers are doing.

Of course, I'm not asking whether it's better or not to make extra payment. Each case has different answer.

Last edited by acegolfer; 03-18-2010 at 10:06 AM..
Reply With Quote Quick reply to this message

 
Old 03-18-2010, 09:59 AM
 
3,932 posts, read 10,483,493 times
Reputation: 2070
It' not a good idea if a person has any other debt. Better to payoff/paydown higher rate non-tax dedutible debt than a low rate mortgage.
Reply With Quote Quick reply to this message
 
Old 03-18-2010, 10:03 AM
Status: "Rain at last!" (set 19 days ago)
 
Location: Jollyville, TX
3,291 posts, read 8,227,647 times
Reputation: 2960
I don't. I don't have any debt to pay down other than a car payment at 0.9%. However, I have 50% equity in my home and no chance of paying it off before I sell it and move, so it doesn't make any sense at all for me to add equity in my house when I could contribute that amount to my 401K or Roth IRA.
Reply With Quote Quick reply to this message
 
Old 03-18-2010, 10:24 AM
 
Location: Plano, Texas
1,676 posts, read 5,980,344 times
Reputation: 682
Quote:
Originally Posted by Moonlady View Post
I don't. I don't have any debt to pay down other than a car payment at 0.9%. However, I have 50% equity in my home and no chance of paying it off before I sell it and move, so it doesn't make any sense at all for me to add equity in my house when I could contribute that amount to my 401K or Roth IRA.

You are 100% correct. I dont pay extra either.
Reply With Quote Quick reply to this message
 
Old 03-18-2010, 11:58 AM
 
Location: Clayton, NC
502 posts, read 1,333,141 times
Reputation: 405
I pay an extra $1.80 every month so my bank draft will be a round number.

It's my Accounting background. We have a thing about change.
Reply With Quote Quick reply to this message
 
Old 03-18-2010, 01:52 PM
 
Location: Vancouver, WA
36 posts, read 174,639 times
Reputation: 19
I plan to since I have no other outstanding debt. I did the math and if I match my extra payment to what I am put away in savings each month I can shorten the life of the loan by a half and save a bucket load in interest.
Reply With Quote Quick reply to this message
 
Old 03-18-2010, 03:01 PM
 
14,660 posts, read 30,640,883 times
Reputation: 13890
It really depends on your interest rate whether or not it is worth it. I personally don't and never plan on doing it, because at 5.25% I can get a much better return on my money elsewhere.

If your investment/savings vehicle can't get you more of a return then your mortgage interest rate, then it may be worthwhile to pay down the principle, but it is probably a better idea to shop for a better investment.

I have always been a firm believer that money in my hands today, working for me, is worth a lot more than equity in a home that is entirely dependent on what my neighbors decide to sell their homes for.

Just remember that by saving and earning a return on the money, you can still accompish paying off the loan early (if that's your goal) when you have saved enough to pay the balance on the mortgage and you will be able to do it sooner with the better returns you get through your investments.
Reply With Quote Quick reply to this message
 
Old 03-19-2010, 10:47 AM
 
Location: Boise, ID
7,716 posts, read 19,469,782 times
Reputation: 8491
Husband and I intend to stay in our house for a long time, and I'm working very hard to be debt free by 40 (I'm 31 now), so I am making extra payments. For the first 6 years, I was paying off all our other debts, so I only rounded up to the nearest $25 mark each month. Now that all our other bills are paid off and we are investing in Roth IRAs and a 401k, I'm paying an extra $250 every month (just started that this month). Going to try that for a few months and see how it goes. After that, I'll review and see if I can increase, or need to stay at $250. (My PI payment is only about $630). After that, I'll apply all bonuses, raises and tax refunds toward paying down the balance.

Could I get a higher return by investing more? Yes, I'm sure I could do better than my 5.75% interest rate. But we are already maxxing 2 Roths and taking full advantage of company match on the 401k, and I want the house payment to go away.
Reply With Quote Quick reply to this message
 
Old 03-19-2010, 10:53 AM
 
Location: NJ
17,579 posts, read 34,327,638 times
Reputation: 15897
Somewhat on the same topic, does anyone pay their mortgage semi-monthly?
Reply With Quote Quick reply to this message
 
Old 03-19-2010, 11:34 AM
 
3,932 posts, read 10,483,493 times
Reputation: 2070
Quote:
Originally Posted by manderly6 View Post
Somewhat on the same topic, does anyone pay their mortgage semi-monthly?
Don't see the point as you can do it on your own for free making just one payment a month. Bi-monthly equals 13 payments/yr. instead of 12. You can take your principal and interest payment divided by 12 and add that much additional to your payment every month and accomplish the same thing.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $99,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

2005-2017, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 - Top