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The sooner you attack the principle and bring that amount down. The amount owed will decrease and so will your interest. There is only one way to do that is just to make extra payments towards your principal. If you pay off in 15 years. That means you just halved the amount of interest you would otherwise pay with a 30 year loan. Its a very simple math. Run ammortization to see how it affects you.
We just crossed the threshold where over half our mortgage payment goes to principal. I think after our first couple payments only $500 went towards it. $500 out of $2650. We had a $414k balance.
Our principal on the 31st of the month was $175k and $1500 of the monthly payment went towards principal. I just kicked another $35k towards it this week so I'm anticipating something like $1650 in December's payment. Our interest rate is 5% BTW and I'm eager to get out of it.
It makes you feel better about the payments when more goes to your debt instead of the bank!
We just crossed the threshold where over half our mortgage payment goes to principal. I think after our first couple payments only $500 went towards it. $500 out of $2650. We had a $414k balance.
Our principal on the 31st of the month was $175k and $1500 of the monthly payment went towards principal. I just kicked another $35k towards it this week so I'm anticipating something like $1650 in December's payment. Our interest rate is 5% BTW and I'm eager to get out of it.
It makes you feel better about the payments when more goes to your debt instead of the bank!
I hear you. I struggle with this as I really, really want to get to a point where I have no mortgage. But I can intellectually understand how that money can be better invested in other ways. But emotionally, I want that mortgage gone. This year I've been putting an extra $500+/- to principal every month. I've also managed to save about 2K or so every month outside of that extra principal payment (in addition to my 401K contributions), so it's not like I'm not also saving and investing too. But I go back & forth about the mortgage. I just need to commit to a plan, one way or another, I think.
I hear you. I struggle with this as I really, really want to get to a point where I have no mortgage. But I can intellectually understand how that money can be better invested in other ways. But emotionally, I want that mortgage gone. This year I've been putting an extra $500+/- to principal every month. I've also managed to save about 2K or so every month outside of that extra principal payment (in addition to my 401K contributions), so it's not like I'm not also saving and investing too. But I go back & forth about the mortgage. I just need to commit to a plan, one way or another, I think.
It's a struggle for me too. I need to decide by January about maxing out our 2019 roth accounts versus continuing on this pay down plan. We really put ourselves into it and got way, way further than I thought possible. So the pragmatic voice is saying, "dude, that's enough... Go take care of this other stuff" but then there is my stubborn voice saying, "but you made a commitment!!!". It's both, really, I did make a commitment... to be financially fit, so it stands that in January I will turn away from the mortgage to fill out these accounts and then when done, my attention will return to the pay down. Unfortunately when in the accumulation phase you don't get to have a break. There is always more to do. But I guess on the positive it means I'm still young enough to be accumulating.
It's a struggle for me too. I need to decide by January about maxing out our 2019 roth accounts versus continuing on this pay down plan. We really put ourselves into it and got way, way further than I thought possible. So the pragmatic voice is saying, "dude, that's enough... Go take care of this other stuff" but then there is my stubborn voice saying, "but you made a commitment!!!". It's both, really, I did make a commitment... to be financially fit, so it stands that in January I will turn away from the mortgage to fill out these accounts and then when done, my attention will return to the pay down. Unfortunately when in the accumulation phase you don't get to have a break. There is always more to do. But I guess on the positive it means I'm still young enough to be accumulating.
You have until April 2020 to contribute to 2019 Roth IRAs.
You have until April 2020 to contribute to 2019 Roth IRAs.
I know that. So instead of the mortgage I will save $6k for my husband in January, $6k in February for myself and another $6-7k in March for my SEP, which I convert into Roth too.
I know that. So instead of the mortgage I will save $6k for my husband in January, $6k in February for myself and another $6-7k in March for my SEP, which I convert into Roth too.
When you round up, does the extra go to principle only?
Matrix:
Yes, but....you HAVE to SPECIFY the extra goes to principle.
Your mortgage is likely to be "sold" to different servicers, so our last servicer had an automatic phone payment system, that, if you offered to pay more than the regular payment it asked you if the extra was to go to the principle, but now we have Citizen's Bank as servicer, and you actually have to talk to a human being to apply anything over the regular payment to the principal.
No matter how they handle it I round up to the next digit place.
As I said in my previous Post, in just 4 years we have shaved off 12 y4m already. At this point, we would be paid off in just about the 15 years we would have had had we taken a 15y fixed, but in tight times, we are only obligated to a 30y fixed payment, that helped this summer when my OH s hours got cut. Now we are back on the regular plan.
But each payment got rounded up, even to the next hundred point.
So your $3462.34 should always be paid as $3500 at minimum extra the extra $38.00 going to principle as a MINIMUM. BUT you can pay $4k and the extra $538.00 extra will definitely reduce your principle much much quicker!
Just be sure to specify that the extra goesto principle, whether In writing, phone payment or human being payment!
Best to you...
Last edited by galaxyhi; 11-09-2019 at 04:49 AM..
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