I've seen some posts about Charles Givens' book and I might order it. Can someone explain how the pay the 30 yr mortgage in 15 works? From what I understand it requires knowing (and paying in advance) the principal for the "next" month, but I'm a tad confused about that.
Thanks everyone, I love this site!
I'd suggest getting it from the library. I like his stuff, but it's not worth paying for IMNSHO.
Here's the short version of how it works:
1. Get an amortization schedule for your loan. You can ask your lender for one, or you can plug your numbers into any one of a bazillion online mortgage calculators. The key thing about an amortization schedule is that it lists the principal and interest amounts for each month's payment.
2. On month 1, pay the principal and interest for month 1 plus the principal amount listed for month 2.
3. On month 2, pay the principal and interest for month 3 plus the principal amount listed for month 4.
4. Repeat the previous two steps for another 178 payments.
Basically, after step 2 is done, you have paid for the first and second months' payments. After step 3 is done, you have paid for the third and fourth months. Because you've paid the principal amount for month 2 in month 1, you save yourself the month 2 interest. Similarly, you've paid the principal amount for month 4 in month 2, so you save yourself the month 4 interest.
Note that if you have a lender escrow account, you'll have to add the escrow amount to each payment as well.
Note that this method will cause your payments to gradually increase each month. If you want a level payment plan, do as pb4uski suggests above and just pretend like you have a 15 year fixed mortgage.
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