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Started By
Message
cutting my 20 year mortgage by making an extra payment..
Posted on 7/15/20 at 11:05 am
Posted on 7/15/20 at 11:05 am
anyone know how many years can be cut off? we just refinanced our 30 year loan that we still owed 24.5 years on down to 20 at a rate of 2.99%.
Im pleased with the deal so far but i just want to knock it down further..
i was thinking an extra payment would probably knock of 3 years..thats a guess.
Im pleased with the deal so far but i just want to knock it down further..
i was thinking an extra payment would probably knock of 3 years..thats a guess.
This post was edited on 7/15/20 at 11:12 am
7
Posted on 7/15/20 at 11:15 am to bleedsgarnet
Download a loan amortization spreadsheet like the one linked below and you can play around with all options to see years saved, interest saved, etc.
https://www.mortgagecalculator.org/download/excel.php
https://www.mortgagecalculator.org/download/excel.php
Posted on 7/15/20 at 11:15 am to bleedsgarnet
Throw extra payment money into index fund and reinvest dividends.
Posted on 7/15/20 at 11:16 am to bleedsgarnet
Google "amortization calculator" and you'll find a bunch of them. You put in your interest rate, date of your loan's start, term of loan...and you can adjust other variables to see what adding small amounts monthly or a lump sum annually will do to your loan repayment schedule, payoff date, and overall interest paid.
Here's one from Bankrate--look for the Add Extra Payments tab. LINK
Here's one from Bankrate--look for the Add Extra Payments tab. LINK
Posted on 7/15/20 at 11:42 am to hungryone
thanks..it only brings it down 19 months...not even two years..i think its best to just not pay a dime extra and be happy with the 4 years i just cut off the loan.
Posted on 7/15/20 at 11:45 am to bleedsgarnet
As others have said, lots of good calculators online where you can play with the numbers. There might even been a calculator on your mortgage companies website. US Bank has one where I can just add either extra payments or extra principle with each payment and it will show exactly how much time savings. We are trying to pay ours down as fast as we can, and even though I know it is better from a numbers perspective to invest that extra money, I want the flexibility and peace of mind of having 0 debt.
Posted on 7/15/20 at 11:59 am to bleedsgarnet
velocity banking
END THREAD
END THREAD
Posted on 7/15/20 at 7:16 pm to bleedsgarnet
At a 2.99% rate I would not apply any extra. Take the extra and put it in a good index fund. But that's just me. I have a 3% on my primary residence. I have enough near cash to pay it off but no desire whatsoever.
Posted on 7/15/20 at 7:41 pm to Fat Bastard
I have watched probably 50 YouTube videos on velocity banking and I still don’t understand how it works haha.
Posted on 7/15/20 at 8:05 pm to dltigers3
i had a 30 and paid it off in something like 14.....if you play with the math and plot it money versus years you will see a slope flatten at around 18 (if i recall)
so you start losing your bang for your buck...
my plan was to knock out the mortage before my kids hit college...
also i was in oil industry which is pretty unstable and so no note let me sleep better....
guys talk about index funds... yeah load up the 401.... but i slept pretty good after the house was paid for and then bought a rental for retirement income.
so you start losing your bang for your buck...
my plan was to knock out the mortage before my kids hit college...
also i was in oil industry which is pretty unstable and so no note let me sleep better....
guys talk about index funds... yeah load up the 401.... but i slept pretty good after the house was paid for and then bought a rental for retirement income.
Posted on 7/15/20 at 8:42 pm to Thecoz
I’m in the same boat, trying to pay our off in 10 years. I know that money would have a higher return in the market, but knowing that we have no debt before either of our kids hit high school will provide so much flexibility for us in the future
Posted on 7/15/20 at 10:31 pm to bleedsgarnet
Rocket mortgage, if you have your mortgage through theM, has an excellent calculator
Posted on 7/16/20 at 8:23 am to bleedsgarnet
A very low rate of interest and the government printing money like mad due to the coronavirus, it is one area where inflation is your friend.
Posted on 7/16/20 at 8:28 am to dltigers3
quote:
I’m in the same boat, trying to pay our off in 10 years. I know that money would have a higher return in the market, but knowing that we have no debt before either of our kids hit high school will provide so much flexibility for us in the future
There is an actual $ value for this so don't let anyone just assume that is not the best financial choice. You have to determine what that value is for yourself but it is definitely worth something to almost everyone out there. Some are just better in tune to the value for themselves than others are.
Posted on 7/16/20 at 8:53 am to PlanoPrivateer
quote:
At a 2.99% rate I would not apply any extra. Take the extra and put it in a good index fund.
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