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Extra Mortgage Payments

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tray831
Dee-licious!

Member since 3/06

5355 total posts

Name:
His Baby

Extra Mortgage Payments



Does anyone pay an extra mortgage payment? If so, how often do you make one?

Trying to figure out if one extra is paid a year (13 payments a year); how many years does that really cut off on a 20 year loan? I’m thinking not too much.

Posted 9/23/20 5:48 PM
 
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RainyDay
LIF Adult

Member since 6/15

3989 total posts

Name:

Re: Extra Mortgage Payments

I'm interested to know too

Posted 9/23/20 6:18 PM
 

GoldenRod
10 years on LIF!

Member since 11/06

26792 total posts

Name:
Shawn

Re: Extra Mortgage Payments

https://www.bankrate.com/mortgage/prepaying-your-mortgage/


Here’s an example of how prepaying saves money and time:

Kaylyn takes out a $120,000 mortgage at a 4.5 percent interest rate. The monthly mortgage principal and interest total $608.02. Here’s what happens when Kaylyn makes extra mortgage payments:

PAYMENT METHOD--- PAY OFF LOAN IN…--- TOTAL INTEREST--- TOTAL INTEREST SAVED

Minimum every month--- 30 years--- $98,888--- $0
13 payments a year*--- 25 years, 9 months--- $82,870--- $16,018
$100 extra every month--- 22 years, 6 months--- $70,944--- $27,944
$50 extra every month--- 25 years, 8 months--- $82,452--- $16,436
$25 extra every month--- 27 years, 8 months--- $89,864--- $9,024

*Extra $608.02 payment


Message edited 9/23/2020 6:40:45 PM.

Posted 9/23/20 6:38 PM
 

queensgal
Smile

Member since 4/09

3287 total posts

Name:

Re: Extra Mortgage Payments t

I always made extra payments ($1k) each month and a lump sum once per year timed with my bonus. I cut a 30 year to 23 by doing this. We are refinancing to a 10 (we’ve lived here 10 yrs). Every little bit helps in my opinion.

The exact math depends on your interest rate and how early you make the payments. For example, your first year making an extra payment saves more than if you are already in year 15. There’s calculators online or you should be able to call your mortgage company and request and amoritization.

Message edited 9/23/2020 8:27:39 PM.

Posted 9/23/20 8:25 PM
 

NervousNell
Just another chapter in life..

Member since 11/09

54921 total posts

Name:
..being a mommy and being a wife!

Re: Extra Mortgage Payments

We did it every single month and paid off our 30 year mortgage in 17 years

Posted 9/23/20 8:31 PM
 

tray831
Dee-licious!

Member since 3/06

5355 total posts

Name:
His Baby

Re: Extra Mortgage Payments

Posted by NervousNell

We did it every single month and paid off our 30 year mortgage in 17 years



Now, that's an accomplishment!
Wish I could do that. That's Awesome!!

Posted 9/25/20 9:03 AM
 

NervousNell
Just another chapter in life..

Member since 11/09

54921 total posts

Name:
..being a mommy and being a wife!

Re: Extra Mortgage Payments

Posted by tray831

Posted by NervousNell

We did it every single month and paid off our 30 year mortgage in 17 years



Now, that's an accomplishment!
Wish I could do that. That's Awesome!!




Thanks. It's so amazing to not have a mortage. We are able to save so much more.
We always looked at it as, the money isn't earning anything in the bank with the way interest rates are...you get nothing.
So why not use that money to pay off a higher interest loan than to sit in a bank each month and earn next to nothing. So anytime we had extra cash, rather than put it in a savings account, we'd put it towards the mortgage principal. (we of course had emergency savings, etc)

Posted 9/25/20 9:13 AM
 

Diane
Hope is Contagious....catch it

Member since 5/05

30683 total posts

Name:
D

Re: Extra Mortgage Payments

We called the mortgage company to see what would be worth dong, refinance or pay extra payments each month towards principal. It worked out that making those extra payments were worth it, because we would be paying a lot in closing costs.

Posted 9/29/20 12:52 PM
 

PitterPatter11
Baby Boy is Here!

Member since 5/11

7618 total posts

Name:
Momma <3

Extra Mortgage Payments

Call your mortgage company. Our old company allowed us to tack on extra to each month. The new company requires us to do a separate payment to ensure it is applied to principal and not the interest.

We refinanced to a 15 year loan in 2015 and will have it paid off by 2025 by making extra payments throughout the year.

Posted 9/30/20 1:44 PM
 

NYCGirl80
I love my kiddies!

Member since 5/11

10413 total posts

Name:

Re: Extra Mortgage Payments

There are calculators online that can help you play around with the numbers, but your best bet is to ask your mortgage company if you have questions.

We have a pretty low interest rate, but just did a loan modification for an even lower interest rate. The money is pretty cheap so right now, it's not worth me putting extra into my mortgage. I'd rather save for big expenses.

Posted 10/6/20 3:03 PM
 
 

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