smokin5s Posted January 20, 2018 Report Share Posted January 20, 2018 Looking at what the bank makes in interest every year and the fact that you could buy your house 3 times by the time the loan is paid back, what is everyone trying to do to pay it off quicker? I've seen a ton of different things that people say to do in order to pay your mortgage off in sub 10 years, but all of them just seem like silly schemes. Anyone with real experience? Quote Link to comment Share on other sites More sharing options...
Green Bastard Posted January 20, 2018 Report Share Posted January 20, 2018 Overpay monthly. Anything more than you are supposed to pay goes directly to the principle. You would be surprised how much it helps. Quote Link to comment Share on other sites More sharing options...
Mallard Posted January 20, 2018 Report Share Posted January 20, 2018 Do a 15 year or overpay your 30 on a 15 year schedule. Sent from my SM-G925V using Tapatalk Quote Link to comment Share on other sites More sharing options...
Dammit Charlie Posted January 20, 2018 Report Share Posted January 20, 2018 We're not, but will be soon enough. We're focusing on paying off any short term debt with interest first. Quote Link to comment Share on other sites More sharing options...
craig71188 Posted January 20, 2018 Report Share Posted January 20, 2018 Overpay monthly. Anything more than you are supposed to pay goes directly to the principle. You would be surprised how much it helps. This, particularly if you can do it in the earlier years of the loan it makes a big difference. Also, refi to a shorter term/lower rate when possible to "jump ahead". For example, 30 year @ 4%, you've been paying for 8 years (22 years left w/o "overpayment"). Refi to 15 year @ 3.25% and cut 7 years and again, pay extra when possible. Excel has a "mortgage amortization" sheet prebuilt. Load your info and print/save to see exactly how principal & interest change over the life of the loan. And yes, mine is paid off! Quote Link to comment Share on other sites More sharing options...
nurkvinny Posted January 20, 2018 Report Share Posted January 20, 2018 Couple extra payments each year. Quote Link to comment Share on other sites More sharing options...
Not Brian Posted January 20, 2018 Report Share Posted January 20, 2018 pay bare minimum and buy cool cars ¯\_(ツ)_/¯ Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted January 20, 2018 Report Share Posted January 20, 2018 Looking at what the bank makes in interest every year and the fact that you could buy your house 3 times by the time the loan is paid back, what is everyone trying to do to pay it off quicker? I've seen a ton of different things that people say to do in order to pay your mortgage off in sub 10 years, but all of them just seem like silly schemes. Anyone with real experience? way back when we started by simply paying-up by a couple hundred bucks. IIRC our mortgage was $900 and we paid upwards of $1,100mo. Then we started making an extra 1-2 extra f those payments per year. we then moved to paying 4 per year, etc. just save up as much as you can when you can and make the payments towards the principle. At some point we made 2x payments. Quote Link to comment Share on other sites More sharing options...
Brandon Posted January 20, 2018 Report Share Posted January 20, 2018 I believe if you pay one extra (full) payment a year on a 30 year amortization you can cut up to 5-8 years off the note depending on what your rate of interest is. Use your tax return to give you your extra note. Also as others mentioned, refinancing down from 23-22 years to 15 may have similar payments with todays interest and chop years aways! ARM notes are not a horrible option either to be honest, they have 15 year fixed arms at lower rates which will save you over the first 15 years, if you are savy you can either pay it down/off or re fi and accumulate savings before the adjustment takes place. Quote Link to comment Share on other sites More sharing options...
Bam Posted January 20, 2018 Report Share Posted January 20, 2018 I don’t think it’s worth going crazy over if you have a good rate. But I switched to a 15 year a few years back and have always rounded up to the next hundred on my payment so both those help quite a bit. Quote Link to comment Share on other sites More sharing options...
TTQ B4U Posted January 20, 2018 Report Share Posted January 20, 2018 I don’t think it’s worth going crazy over if you have a good rate. Agree to an extent but it's not just about the rate, it's about the amount of money being paid over 2-5 years just in interest alone. Build up equity and borrow from yourself to invest in rentals and in a few years you'll be making money with your money as it should be. Quote Link to comment Share on other sites More sharing options...
Brandon Posted January 20, 2018 Report Share Posted January 20, 2018 Agree to an extent but it's not just about the rate, it's about the amount of money being paid over 2-5 years just in interest alone. Build up equity and borrow from yourself to invest in rentals and in a few years you'll be making money with your money as it should be. Cash on Cash return. Quote Link to comment Share on other sites More sharing options...
smokin5s Posted January 20, 2018 Author Report Share Posted January 20, 2018 so when everyone says they pay over, do they pay like 100 over or do they pay the whole payment over? Also how in the world do you guys have such low mortgages? I pay almost 1,600 a month. When you pay over, do you have to tell the mortgage company every month to apply to principal or are they smart enough to automatically do it? Quote Link to comment Share on other sites More sharing options...
iwashmycar Posted January 20, 2018 Report Share Posted January 20, 2018 My buddy has started paying still the same mortgage amount, but paying Bi-weekly...something that does to interest? I don't know the hows or whys but wanted to bring it up. Quote Link to comment Share on other sites More sharing options...
evan9381 Posted January 20, 2018 Report Share Posted January 20, 2018 If you pay biweekly (basically 13 payments per year), it'll shave 7 years off a 30 year loan. My mortgage is like $646/mo with taxes and interest and I pay $750. 2 years ago it was like $735/mo then I refinanced from a 5% loan to 3.875. I took out about 5k for new windows and doors and even paying the same $750, it'll be paid off quicker than if I kept the 5% loan. I think what I calculated was that I'll pay it off this new 30 year/3.875 mortgage in 21 years at this rate, where I would have still had 23 years left on my old mortgage. And I got new windows and doors. Sounded like a win-win to me. Marc did me well. Quote Link to comment Share on other sites More sharing options...
iwashmycar Posted January 20, 2018 Report Share Posted January 20, 2018 hmmm... sounds best to just pay extra... https://www.investopedia.com/financial-edge/0412/is-making-biweekly-mortgage-payments-a-good-idea.aspx?lgl=myfinance-layout-no-ads Quote Link to comment Share on other sites More sharing options...
smokin5s Posted January 20, 2018 Author Report Share Posted January 20, 2018 so bi-weekly just gives you a extra month payment a year... is it just an extra month worth of principal payment a year or are we talking principal / interest / insurance? Quote Link to comment Share on other sites More sharing options...
iwashmycar Posted January 20, 2018 Report Share Posted January 20, 2018 read that link above... yes. but you can just do that yourself it seems. No need to contractually get into it. Quote Link to comment Share on other sites More sharing options...
carl1647545492 Posted January 20, 2018 Report Share Posted January 20, 2018 Looking at what the bank makes in interest every year and the fact that you could buy your house 3 times by the time the loan is paid back, what is everyone trying to do to pay it off quicker? I've seen a ton of different things that people say to do in order to pay your mortgage off in sub 10 years, but all of them just seem like silly schemes. Anyone with real experience? Honestly the fact your asking "how" shows your pretty motivated to get it done early,the rest is just math,pay as much every month/year and 30 yrs becomes 15 pretty quickly. We did ours in 11 yrs and its motivating enough where the sacrifice doesn't seem like one at all. Quote Link to comment Share on other sites More sharing options...
bdhill Posted January 20, 2018 Report Share Posted January 20, 2018 with rates super low, under 4%, not a lot of upside to paying it off early...amazon stock has gone up 40% in 3 months...better place to put money for a quick gain, and then pay off house? Quote Link to comment Share on other sites More sharing options...
mmrmnhrm Posted January 20, 2018 Report Share Posted January 20, 2018 Absolutely nothing. As Bruce just said, there's a lot more upside to investing that money elsewhere than there is in paying off your note early, especially when Marc does his homework and gets you 3.5% Quote Link to comment Share on other sites More sharing options...
smokin5s Posted January 20, 2018 Author Report Share Posted January 20, 2018 I find it interesting that people think keeping debt and paying insane monthly payments is a better answer to not having that debt... The part I'm also having a hard time understanding. You can get a 7 year loan on a Tesla that's 100k and pay $1,2xx a month on it and pay it off... Why am I paying more and not paying off that amount as quickly? The way that mortgages handle the interest is the problem. They have you pay off the interest first before principal really gets affected... To me, that should be illegal. I think it's called amortization. Quote Link to comment Share on other sites More sharing options...
bdhill Posted January 20, 2018 Report Share Posted January 20, 2018 Most people move every 3-7 years. Most people on CR keep cars for how many months? 24-36? most cars and homes never get paid off...get the lowest payment you can in this climate and invest. When rates are over 6...pay off the mortgage first... Quote Link to comment Share on other sites More sharing options...
smokin5s Posted January 20, 2018 Author Report Share Posted January 20, 2018 been 8 years, I'm still at my house with no interest in moving. I do drive a 2016 car but I also own a 1996 and 1997 cars as well... so... I might not really fit into the category of most people. :-) Plus not having that mortgage payment always sounds like a good idea. I'm also a guy who pays off his credit card at the end of every month and just uses it for points. Quote Link to comment Share on other sites More sharing options...
Cordell Posted January 20, 2018 Report Share Posted January 20, 2018 been 8 years, I'm still at my house with no interest in moving. I do drive a 2016 car but I also own a 1996 and 1997 cars as well... so... I might not really fit into the category of most people. :-) Plus not having that mortgage payment always sounds like a good idea. I'm also a guy who pays off his credit card at the end of every month and just uses it for points. I'm with you. I understand the thinking that has been talked about in this thread, but we have 4 of our 5 cars paid off. We have basically gotten out of debt with the exception of the house. I like the freedom that gives us financially so as things progress I'll be doing the same thing paying more towards principle. I'd rather have freedom then a bunch of debts to manage. This goes along with the way people look at retirement, do you want a 401k relying on the market thinking your money with grow faster, or do you want your retirement in gold and bonds that is much more of a sure thing. Maybe it's old school versus a more modern outlook, I don't know because I'm no expert. I have little interest in buying new cars every few years, or buying another house either. So I suppose that isn't the norm much anymore either. Quote Link to comment Share on other sites More sharing options...
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