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Hoping the finance / number wizards here can confirm what online calculators are telling me. I'm trying to determine how much per month we need to be paying on our mortgage starting January 2014 to have it paid off by April 2028.
Our current mortgage balance is $73,713.17. Interest rate is 5.25%. Currently we have 26 years, 6 months left on a 30 year mortgage, with a monthly minimum payment of $585.40 (although we pay at least a little extra every month).
Hoping the finance / number wizards here can confirm what online calculators are telling me. I'm trying to determine how much per month we need to be paying on our mortgage starting January 2014 to have it paid off by April 2028.
Our current mortgage balance is $73,713.17. Interest rate is 5.25%. Currently we have 26 years, 6 months left on a 30 year mortgage, with a monthly minimum payment of $585.40 (although we pay at least a little extra every month).
I would look into refinancing that mortgage to a 15 year or 10 year if you are looking to save money. Chances are you will have a similar payment but more will be going to principal. Find a mortgage calculator online and run the numbers to see which is more cost effective for you because sometimes just paying extra to the principal will be a better deal.
Looks like $800/month will pay it off in 2028 at your current rate actually a bit less then that probably, but at 4%, for example, that will pay it off with $753/month in Dec 2028 (same dates for the 800/month).
Hoping the finance / number wizards here can confirm what online calculators are telling me. I'm trying to determine how much per month we need to be paying on our mortgage starting January 2014 to have it paid off by April 2028.
Our current mortgage balance is $73,713.17. Interest rate is 5.25%. Currently we have 26 years, 6 months left on a 30 year mortgage, with a monthly minimum payment of $585.40 (although we pay at least a little extra every month).
Let's see. Assuming that 5.25% is compounded monthly, the monthly effective interest rate is 5.25%/4=0.4375%.
Using the annuity due formula with interest rate of 0.4375% and 318 payments, the annuity factor is 172.289. That means the present value of making 318 monthly payments of 1 dollar each at the beginning of the month is $172.289. For the present value to be $73,713.17, the monthly payment will have to be 73,713.17/172.289 = $427.85
This is not factoring in taxes and other costs or fees associated with the mortgage. I will estimate the percentage of overhead cost as a percentage of each payment = $585.40/427.85-1= 0.368247. This means for each 1 dollar of payment you make toward your mortgage you'll have to spend another 36.8 cents on other costs.
Now given that you want to make 170 monthly payments only, the annuity factor will be 120.27. Dividing $73,713.17 by this, we end up with $612.88. Multiply this by 1.368247, and we have $838.58 for monthly payment.
Thanks for the responses. Based on calculators and the posts here, it looks like we need to be paying between $760 - $850 each month. That's a little better than the $900/month I was guesstimating on my own. So we'll shoot for the $850.
Didn't think to post the other costs built into the mortgage that AmFest mentioned (for us that's homeowners insurance, MIP and count taxes); looks like they withhold $153.46/month for escrow for these things.
If you are disciplined enough, there is no reason you could not send in another $400-$500/month and have this thing knocked out in 10.5 years.
Current loan paid back as set up from this point forward: $63,1683.67/interest
if you paid an additional $400/month you would pay $19,844.85/interest (pays off 10.5 years from now)
That's a savings of over $43k!!!
IF you were to refinance into a 10 year loan @ 3.5% interest....it would cost $13,757.09/interest. You will have to pay about $900/month (includes escrows).
That's in the ballpark of almost $50k in savings from what you are doing now.
Sorry to go off topic, but OMG $585/mo for your mortgage which includes $153/mo going to escrow? My monthly escrow payment by itself is over $1000/mo for a house that's valued below average for my town. It just blows my mind when I see these types of questions in the General Forums. Sometimes I wonder if I could just retire at the age of 35 and move to Missouri or Indiana, lol.
Thanks for the responses. Based on calculators and the posts here, it looks like we need to be paying between $760 - $850 each month. That's a little better than the $900/month I was guesstimating on my own. So we'll shoot for the $850.
Didn't think to post the other costs built into the mortgage that AmFest mentioned (for us that's homeowners insurance, MIP and count taxes); looks like they withhold $153.46/month for escrow for these things.
Have you looked into getting rid of that MIP, PMI rates have dropped. Also look into lender paid mortgage insurance.
What you start getting quote, tell them to match up the maturity date to your existing to compare apples to apples.
Try to avoid paying cost and don't build it into the loan amount either
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