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re: Home Equity question
Posted on 8/2/13 at 12:59 pm to Lsut81
Posted on 8/2/13 at 12:59 pm to Lsut81
quote:
Well I am completely wrong then... I did not know that your actual interest payments could change from month to month if you paid more down on your principal.
This is actually a pretty good amortization calculator. You can mess around with it and select whatever amount extra principal you want to pay each month and see how it affects your balance on a month-to-month basis.
BankRate amortization calculator
Posted on 8/2/13 at 1:01 pm to Latebloomer
quote:
I would just be concerned about putting the money into paying down the mortgage just because something else might come up.
Yea, this is a good point. Maybe I could do like half/half or something.
Posted on 8/2/13 at 1:01 pm to Lsut81
quote:
Well I am completely wrong then... I did not know that your actual interest payments could change from month to month if you paid more down on your principal.
To put it simply, your mortgage is $1,000/month. You make your first payment and $950 goes toward interest and $50 goes toward principal. The 2nd month, $948.25 goes toward interest and $51.75 goes toward principal and so on.
Just a very simplistic answer that does not take escrow into account.
ETA: So if you make additional payments toward principal, it will knock the interest payments down even further each month.
This post was edited on 8/2/13 at 1:02 pm
Posted on 8/2/13 at 1:03 pm to mglsu21
quote:
This is actually a pretty good amortization calculator. You can mess around with it and select whatever amount extra principal you want to pay each month and see how it affects your balance on a month-to-month basis.
Just looked at it...
Posted on 8/2/13 at 1:06 pm to OnTheBrink
quote:
ETA: So if you make additional payments toward principal, it will knock the interest payments down even further each month.
Just opened my mortgage 2 months ago....Messing around with the calculator I determined that if I paid an extra $100/month I would pay it off 5 years early, $200/ month would be 9 years early, and $300/month would be 11.5 years early. Crazy considering how low the rates are now.
Posted on 8/2/13 at 1:09 pm to mglsu21
Yep, its crazy how it adds up, I should have added that while reducing what you pay in interest, you increase what you pay in principal, thus shortening your mortgage.
Posted on 8/2/13 at 1:12 pm to OnTheBrink
If I go $200 more a month, it cuts my mortgage by 10yrs.
Posted on 8/2/13 at 1:13 pm to Lsut81
quote:
If I go $200 more a month, it cuts my mortgage by 10yrs.
That's what we do currently, but I'd like to up it even more.
Posted on 8/2/13 at 1:20 pm to RandySavage
So now that we've established the rules, do you guys think it would be in my best interest to start putting a significant amount more into the principal?
Posted on 8/2/13 at 1:23 pm to RandySavage
quote:
That's what we do currently, but I'd like to up it even more.
I've got 417k locked up for 30 years at 3.625%. I'm cherishing that shite as long as possible.
Anything over what you're doing should be looking for a return on life.
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