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Old 01-10-2017, 02:40 PM   #21
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OP,

I pay my mortgage online every month. I have been prepaying (off and on) for several years now. The term of the mortgage is 30 years, but I will have it paid off at exactly 15 years.

The online payment screen allows me to choose either "extra principal payment" or "additional escrow payment" and to enter whatever dollar amount I choose (if any) each month. The extra principal payments are reflected immediately in the next month's statement.

Years ago when I began prepaying, I found an online calculator which allowed me to do all the "what if" scenarios, and it calculated how much I would save in interest in each scenario. When I saw that I could save $59,000 in interest over the life of the loan it was a no-brainer for me.

I also created my own excel spreadsheet to track whether the online calculator was correct, and it was - down to the penny every month.

Every now and then, I take out my original amortization table to see how many years "ahead" I am on payments. It keeps me going!

Note: I purchased my first house at a later age than most people (44 y.o.) and I promised myself I would pay it off before retirement - only 11 months to go to payoff!

Good luck with your plan.
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Old 01-10-2017, 04:34 PM   #22
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We used the original paper printed copy of mortgage, and sent in the coupons. Always paid the exact principal required for future months. Then we knew where we were in the schedule.
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Old 01-10-2017, 05:53 PM   #23
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Wow... I am a bit surprised how many people actually do something to pay their mortgage....

When I signed mine, I set mine for autopay with my bank for 179 pmts... have not done anything for 3 or 4 years except make sure money is in the bank...
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DIFFERENT mortgage payoff question
Old 01-10-2017, 06:01 PM   #24
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DIFFERENT mortgage payoff question

We had a 15 year mortgage and I did a refi about 5 years later into another 15 year mortgage. Created my own 10 year amortization schedule in excel so I could pay it off on the original schedule.

Easy to calculate this and can check balance on credit union app (to make sure it matches my spreadsheet).
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Old 01-10-2017, 07:39 PM   #25
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Took out my mortgage in 1984. 30000.00 @ for 30 years at 10.75%. That was a good rate at the time. I knew I needed to not take 30 years to avoid all that interest. When I looked at my amortization schedule I saw that if I increased my monthly payment by 50.00 on the 1st payment, I suddenly only had a 29 year mortgage. Paid extra 50.00 each payment and then a lump sum and mortgage was retired in seven years. Debt free ever since.
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Old 01-10-2017, 08:07 PM   #26
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Took out my mortgage in 1984. 30000.00 @ for 30 years at 10.75%. That was a good rate at the time. I knew I needed to not take 30 years to avoid all that interest. When I looked at my amortization schedule I saw that if I increased my monthly payment by 50.00 on the 1st payment, I suddenly only had a 29 year mortgage. Paid extra 50.00 each payment and then a lump sum and mortgage was retired in seven years. Debt free ever since.

Yea, those were the days.... it seems so strange now with the interest rates so low and nothing is sight to make them go up that high again...

I had you beat though... not exactly sure, but IIRC I was at 60,000 and 11.5% interest... and that was a special tax program for first time home buyers... I refied that loan twice that I can remember...

Like you, I was paying that down..... but once I got it down into the 6% range I just paid my required pmt....
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Old 01-10-2017, 10:13 PM   #27
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Originally Posted by Texas Proud View Post
Wow... I am a bit surprised how many people actually do something to pay their mortgage....

When I signed mine, I set mine for autopay with my bank for 179 pmts... have not done anything for 3 or 4 years except make sure money is in the bank...
+1, but at 3.375% I'm in no hurry to pay it off.
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Old 01-10-2017, 10:15 PM   #28
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Yea, those were the days.... it seems so strange now with the interest rates so low and nothing is sight to make them go up that high again...

I had you beat though... not exactly sure, but IIRC I was at 60,000 and 11.5% interest... and that was a special tax program for first time home buyers... I refied that loan twice that I can remember...

Like you, I was paying that down..... but once I got it down into the 6% range I just paid my required pmt....
That's nothing... our first mortgage was in 1984 and was 13%.... ouch... pains me to just think about it. One good thing though, between house changes and refinancing we have had probably 9 mortgages over the years and our mortgage rate has never gone up... just down.
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Old 01-14-2017, 01:29 PM   #29
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Originally Posted by Texas Proud View Post
Wow... I am a bit surprised how many people actually do something to pay their mortgage....

When I signed mine, I set mine for autopay with my bank for 179 pmts... have not done anything for 3 or 4 years except make sure money is in the bank...
+1
I set mine up for autopay and never look at it. Once a year the bank refigures the escrow and tells me the new payment -- which rarely is more than a few dollars different (this year it was 6 cents).
I go into my bank account bill pay and enter the new payment, done and done for another year.
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Old 01-14-2017, 01:38 PM   #30
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We used the original paper printed copy of mortgage, and sent in the coupons. Always paid the exact principal required for future months. Then we knew where we were in the schedule.
Yes, this is the easist way to do it.

When you make an extra principal payment, you skip ahead in the amort table. If you make the exact amount of the principal on the next line n the table, you have saved the interest amount on that line.
The downside is that you have shaved one payment off, but it is the very last payment, so it won't come until 15-20-30 years from now.

But... this is not the best way to prepay the mortgage. You are better off making a "Mortgage Freedom Acount" where you put those extra payments, keep to the scheduled mortgage payments, and then pay off the mortgage in one fell swoop when the MFA balance in enough to pay off the mortgage.

That way, you keep the money in your hands and not in the hands of the bank. And if you hit a rough patch and can't make the regular payment you can use the MFA account as the source of funds to make the payment. Because if you don't make the monthly payment the bank will foreclose on you and you'll lose everything, even the extra principal payments you voluntarily paid. They won't give that back to you.
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Old 01-14-2017, 02:20 PM   #31
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+1
I set mine up for autopay and never look at it. Once a year the bank refigures the escrow and tells me the new payment -- which rarely is more than a few dollars different (this year it was 6 cents).
I go into my bank account bill pay and enter the new payment, done and done for another year.
+2 When we refinanced I set up a recurring monthly transfer from my bank to the servicer for the monthly payment and have set it and forgot it... other than having to change it twice in 5 years because the servicer changed.
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Old 01-14-2017, 03:05 PM   #32
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+1
I set mine up for autopay and never look at it. Once a year the bank refigures the escrow and tells me the new payment -- which rarely is more than a few dollars different (this year it was 6 cents).
I go into my bank account bill pay and enter the new payment, done and done for another year.

I have no escrow so mine is the same for all payments.... never have to do anything!!!
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Old 01-15-2017, 09:17 PM   #33
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Originally Posted by applewoodsb View Post
Took out my mortgage in 1984. 30000.00 @ for 30 years at 10.75%. That was a good rate at the time. I knew I needed to not take 30 years to avoid all that interest.


Quote:
Originally Posted by Texas Proud View Post
Yea, those were the days.... I had you beat though... not exactly sure, but IIRC I was at 60,000 and 11.5% interest... and that was a special tax program for first time home buyers...


Quote:
Originally Posted by pb4uski View Post
That's nothing... our first mortgage was in 1984 and was 13%.... ouch... pains me to just think about it.

Luxury!!

In my day they wanted 17% for a fixed so I swallowed hard and signed on the dotted line for a 15.5% adjustable. Thankfully, rates soon turned around and I was glad I hadn't locked into the fixed. But I was young and naiive and any favorable outcome was due more to luck than brains...
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Old 01-16-2017, 08:26 AM   #34
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You're welcome. It's my favourite mortgage calculator.

BTW, the money you are paying down is the principal. Your actions are guided by your principles.
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Old 01-16-2017, 08:36 AM   #35
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That's bloody ridiculous that she was fired... I thought her response was wholly appropriate... made a good point...witty but not disparaging.
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Old 01-16-2017, 08:45 AM   #36
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That's nothing... our first mortgage was in 1984 and was 13%.... ouch... pains me to just think about it. One good thing though, between house changes and refinancing we have had probably 9 mortgages over the years and our mortgage rate has never gone up... just down.

Yep, ours was $45,000 at 12 3/8% for 30 years in 1983. We refinanced when rates dropped to 9% and then again at 7%, never going longer than our original date. Paid it all off early, before DH retired.


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Old 01-16-2017, 08:56 AM   #37
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Was a bit obsessive about mortgages. With the rentals we always had at least two paying down and I was rabid about sticking every spare cent on the highest interest loan, paying it off, then rolling the spare money into the next loan. The gal's ahHAH! moment was when she found a free program called Zilch (still out there - now they want $40 - madness!). Zilch showed just how much time and money was saved by doing that sort of debt snowballing.

My biggest debt agony was when we bought our biggest multi and they wanted both an escrow account for taxes and insurance AND had a three year early payoff penalty.
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Old 01-16-2017, 09:04 AM   #38
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When I prepaid my mortgage decades ago one needed to tell the processor to apply the over payment to principal. They may do that automatically now or there may be regulation that stipulate that... it only makes sense... at least to me. But I would tell them anyway.

I guess someone might prepay so they did not have to make some number of payments... like when they are going on vacation. But applying to principal would have them missing payments.

But as noted above... attacking the principal early will cut down the total loan payments significantly.
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Old 01-16-2017, 09:54 AM   #39
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As a slight twist on either saving the pre-pay yourself until the end or pre-paying every month, we saved up each year. Then said well we made it this far, no crisis present, so we then pre-paid the year's savings. And so forth. Not as dramatic as the monthly item but more advantageous than the wait till the end.
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Old 01-16-2017, 10:04 AM   #40
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Luxury!!

In my day they wanted 17% for a fixed so I swallowed hard and signed on the dotted line for a 15.5% adjustable. Thankfully, rates soon turned around and I was glad I hadn't locked into the fixed. But I was young and naiive and any favorable outcome was due more to luck than brains...
And the "conventional wisdom" at the time was that we would never see interest rates below 10% in our lifetime
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