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  1. #105
    Join Date
    Apr 2014
    Location
    Kabul, Afghanistan
    Posts
    41

    Budget freindly early pay off

    Simplest way to pay your home off in half the time is to simply make (1) extra house payment a year.

    Another way is to make (2) payments each month, split your regular house note in half and send it in.
    I.E. $1000 house note due on the 1st of the month, send $500 on the 15th & $500 on the last day of the month (pryor to the due date of corse).

  2. #106
    Join Date
    Aug 2009
    Location
    Maine
    Posts
    3,222
    I just usually send in an extra $50 a month and add a bit to the escrow account on occasional. It help your FICO to always over pay on any credit account, even if its just 10 cents.
    Quote Originally Posted by BIGABOW View Post
    Simplest way to pay your home off in half the time is to simply make (1) extra house payment a year.

    Another way is to make (2) payments each month, split your regular house note in half and send it in.
    I.E. $1000 house note due on the 1st of the month, send $500 on the 15th & $500 on the last day of the month (pryor to the due date of corse).

  3. #107
    Join Date
    Nov 2011
    Location
    Central Va.
    Posts
    1,043
    Quote Originally Posted by BIGABOW View Post
    Simplest way to pay your home off in half the time is to simply make (1) extra house payment a year.

    Another way is to make (2) payments each month, split your regular house note in half and send it in.
    I.E. $1000 house note due on the 1st of the month, send $500 on the 15th & $500 on the last day of the month (pryor to the due date of corse).
    I was told once that paying one extra house payment a year reduces a thirty year loan by twelve years. It was an mortgage adviser that told me that so not sure how accurate it might be.

  4. #108
    Join Date
    Jul 2010
    Location
    napping on the couch
    Posts
    1,627
    If you guys have an employer that matches you 401k contributions, you really need to run the numbers over 30 vs. paying down the principal of your house. There are compound interest calculators and mortgage calculators on line.

    Also, I think what Bigabow is referring to is paying you mortgage payment every 4 weeks vs every month. It will add one more payment per year and isn't really felt that much in your monthly bills. You adapt to the small change in your finances. It is a good way to add the one extra payment per year.

  5. #109
    Join Date
    Dec 2003
    Posts
    2,395
    Quote Originally Posted by Brian8383 View Post
    If you guys have an employer that matches you 401k contributions, you really need to run the numbers over 30 vs. paying down the principal of your house. There are compound interest calculators and mortgage calculators on line.

    Also, I think what Bigabow is referring to is paying you mortgage payment every 4 weeks vs every month. It will add one more payment per year and isn't really felt that much in your monthly bills. You adapt to the small change in your finances. It is a good way to add the one extra payment per year.
    If you know the stock market will do over the next 30 years what it has done in the past maybe paying off your house is not a good strategy. The thing is, just because the market has done 8% average in the past does not mean it will do this in the future.

    I had my house paid for before I was 40 and have been totally debt free since. i dont regret doing this even though I could have more net worth if Id kept the mortgage and invested. Just feels good not to have a house payment.

  6. #110
    Join Date
    Jan 2001
    Posts
    7,756
    Quote Originally Posted by BIGABOW View Post
    Simplest way to pay your home off in half the time is to simply make (1) extra house payment a year.

    Another way is to make (2) payments each month, split your regular house note in half and send it in.
    I.E. $1000 house note due on the 1st of the month, send $500 on the 15th & $500 on the last day of the month (pryor to the due date of corse).
    Did you make that knife in your avatar pic ???
    YOU SHALL REAP WHAT YOU HAVE _______ SOWN

  7. #111
    Join Date
    Jul 2010
    Location
    napping on the couch
    Posts
    1,627
    Quote Originally Posted by bigtime View Post
    If you know the stock market will do over the next 30 years what it has done in the past maybe paying off your house is not a good strategy. The thing is, just because the market has done 8% average in the past does not mean it will do this in the future.

    I had my house paid for before I was 40 and have been totally debt free since. i dont regret doing this even though I could have more net worth if Id kept the mortgage and invested. Just feels good not to have a house payment.
    I'm not saying paying off your house is a bad move. It is a brilliant, amazing accomplishment. You have invested wisely in your future.

    I am saying, especially if you have an employer match, you will almost definitely end up with more by investing especially if you start early. Run the numbers at a measly 4% which you can be guaranteed with safe investments. $6k per year with employer match of 50% you end up with over $500,000. That is tripling your investment.

    I'm not saying you should do one or the other. Both are great financial moves. I'm just giving people a different way to think about investing for the future. Yeah, the market has risks if you are looking for 10% growth, but there are safe investments if 4% is OK with you.

  8. #112
    Join Date
    Jul 2010
    Location
    napping on the couch
    Posts
    1,627
    Really, I am seriously saying what you have accomplished is amazing. And like you said, to have the piece of mind and security of having your house paid off is sometimes worth more than the likelihood of more money down the road. I'm envious that you having no more mortgage payments.

  9. #113
    Join Date
    Apr 2014
    Location
    Kabul, Afghanistan
    Posts
    41
    Quote Originally Posted by Brian8383 View Post
    If you guys have an employer that matches you 401k contributions, you really need to run the numbers over 30 vs. paying down the principal of your house. There are compound interest calculators and mortgage calculators on line.

    Also, I think what Bigabow is referring to is paying you mortgage payment every 4 weeks vs every month. It will add one more payment per year and isn't really felt that much in your monthly bills. You adapt to the small change in your finances. It is a good way to add the one extra payment per year.
    That's certainly a way to do as well with the same result, but I have seen plans to just send in an additional payment at the end of the year. When you make two payments per month with sending in the additional payment, it adjust the interest amount. I am not a mortgage expert or claim to be just trying to help others as you folks here are.
    Quote Originally Posted by corny View Post
    Did you make that knife in your avatar pic ???
    Thanks but, no its just a Winchester Wally world special one of the kids at the hunting club had and I took a set of sheds they found that day and made "still life photo"

  10. #114
    Join Date
    Jul 2009
    Location
    South Carolina
    Posts
    3,191
    All this talk about adding extra payments got me curious so I added an extra payment adjustment to my mortgage payoff calculator. You can add an extra payment once a year, twice a year or every month to see how it changes your payoff.
    http://www.money.oldnewtimer.com/loan_payoff.html

    The left calculator is for the extra payments and the right one is a standard mortgage calculator. It's interesting to see how much interest rates effect things in all ways. If you're not making extra payments monthly then wen you make the payment also will change the out come. I figured on other payments being made the first or seventh month each year.
    Gary
    -----------
    http://www.oceanhvac.com
    An engineer designs what he would never work on.
    A technician works on what he would never design.

  11. #115
    Join Date
    Sep 2002
    Location
    Virginia
    Posts
    3,163
    Ok i have an idea , if you have an extra lump of cash saved each month , send half to principal on house , half to investing.

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