Comments on: How to Pay Off Your Mortgage Early

By: sm

sm — Wed, 10 Mar 2010 20:22:17 +0000

Yes, you are right, CharlieBoy. I looked into that charge, it was 2.5%. My mortgage is @ 5.5%. It just gives me more motivation to save for credit card pay off.

By: CharlieBoy

CharlieBoy — Wed, 10 Mar 2010 19:40:31 +0000

sm, credit card companies will charge you a transfer fee. I’ve done the math and decided that it’s not worth the risk.

By: sm

sm — Wed, 10 Mar 2010 19:13:36 +0000

One approach, that might work is if you are getting 0% interest for 12 months on credit cards offers, select an amount that you can definitely save up for paying off that credit card debt. Apply that amount to your mortgage. Any thoughts?

By: CharlieBoy

CharlieBoy — Wed, 10 Mar 2010 15:26:17 +0000

Pat, if your house is paid off, I give you permission (;)) to invest in a rental property. Look at the historic prices of houses and you will realize that it is a better investment than the stock market. Look at the chart in my post here:

http://solidpersonalfinance.wo.....or-invest/

By: pat

pat — Wed, 10 Mar 2010 01:59:32 +0000

what if after paying off your mortage and living mortgage free for several years we decided to buy another house, the market has been soft and we are thinking about renting for 2-3 years while trying to pay the new mortgage early any ideas????

By: CharlieBoy

CharlieBoy — Mon, 08 Feb 2010 22:57:03 +0000

I’ve decided that paying my mortgage off is as important as air. I’ve put it into turbo mode. First, I have been paying in advance, which has made it so my next payment is due in about 14 months. That would provide me with enough protection from a job loss. On one month, I make two separate payments (until I am 24 months ahead of schedule), on the following month, I make at least two principal payments. In a few months, I expect to make triple principal payments every other month. IT’S FREEDOM OR DEATH!

By: Jennifer

Jennifer — Mon, 08 Feb 2010 22:53:31 +0000

Fran, as moneywise said, check mortgage calculators. Also, don’t get overwhelmed with extra payments…be wise about it. Whatever extra amount you can pay towards your mortgage is better then nothing, but not at the expense of not having things like an emergency fund.

By: Jennifer

Jennifer — Mon, 08 Feb 2010 22:49:24 +0000

All I know is that Accelerated Bi-weekly payments has gone a long way to putting a dent into our mortgage. The formula is slightly different from regular bi-weekly – the amount we pay is higher (but negligible) compared to regular bi-weekly payments. We’re fortunate, because we also have in our mortgage contract a clause that allows us to do double-up payments, which we do. The double-up payments go directly to the principal; the regular payments are, of course, split between interest and principal. Also, we’re allowed to pay 10% or the original mortgage amount on the anniversary date.

By: moneywise

moneywise — Mon, 01 Feb 2010 01:28:21 +0000

Fran, use any of the on-line mortgage calculators to figure out how much extra you need to pay. You will just need to enter the loan amount remaining, the interest rate and the number of years.

By: Fran

Fran — Mon, 25 Jan 2010 01:50:42 +0000

I financed 108,000 at 4.75 fixed conventional for 30 yrs. How much extra do I need to pay monthly to pay off in 15 yrs. My payment now is 571.00. March will be the first yr. Thank you

By: scott

scott — Thu, 21 Jan 2010 04:54:34 +0000

I’m not done with paying off my mortgage yet but I have a nice system worked out and I wanted to share.

1. 25% LTV required these days to get a home equity loan. Sorry to those of you who don’t have that yet, or have it any more with the current times.
2. Open a check book with a bank, in my case M&I
3. Home equity loan open with the same bank, (must be the same bank so you can move funds same day between the home equity line of credit and the check book).
4. Setup overdraft protection on your check book to be covered by the home equity line of credit.
3. Mortgage the house with another bank, in my case it’s a 30 year.

The system:
1st, Direct deposit from my wife and my job goes into the check book.
2nd, pay all bills, setup auto bill pay the day it’s due which keeps the money working for you as long as possible.
3rd, log into the Mortgage account and make a payment plus what ever extra principle you have in your check book to drain your check book to $0. The nice part is it tends to take 3 days before the money is drawn from my check book but it hits the mortgage the day I make the payment.
4th, Live for two weeks with a $0 balance in your check book! The overdraft protection draws money into your check book when ever you buy something, draw out cash, or us the credit from your check book. The balance grows on the HELOC but you defer interest until the day after you needed money.
5th, 2 weeks goes by and you get paid, pay off the HELOC, pay the bills, make the mortgage payment.
5th, If you want to go a step further, use a credit card which is a 1 month free loan to defer payments even longer so that you can use the credit card companies money for an extra month!

My wife and I are on track to pay off our $200,000 30 year mortgage in 4.3 years! The point is every penny you don’t spend is going to pay interest on your mortgage the day that you get it. You never have cash on hand but you have credit available for the HELOC when ever you need it for an emergency.

I was tired of conventional so I figured out the extreme, hope it helps someone else to their financial freedom. I’m about $20,000 closer to mine in about 6 months!

By: CharlieBoy

CharlieBoy — Fri, 15 Jan 2010 14:33:59 +0000

Everybody, play CLOSE ATTENTION to what Linda (post # 50) says above. Do NOT neglect your emergency money. If you pay down your principal while neglecting to build a very decent emergency fund, you could lose your house if you lose your job. Your mortgage will be due even though you lost your job. My approach has been to alternate between paying more towards the principal and paying ahead of schedule. On month 1, I will make two separate (full) payments. On month 2, I will make a single payment and double the principal. So, as a result, my next payment is due in 14 months from today if I lose my job, and I have been paying down my principal at the same time. But I can afford to make the full extra payment every other month because I bought less house than I was told I could afford and I paid off my cars. I use every single extra cent towards my dream of being mortgage free someday. I expect to be free in 4 to 5 years.

By: Terryb

Terryb — Sun, 03 Jan 2010 00:11:54 +0000

This whole section is very informative. I started in with a new construction loan in 2006. I moved in 2007 with a 6.5% loan. I kept trying to refin, hearing the rate was going down. It was time consuming, but after contacting my local mortgage brach. In 2007, a loan for $155,000 @ 6.5%.
Now $150,000@4.75% and still 30yrs looks and feels better, to me. I lost the original appraisal value from $175k to 150k in 08. The kicker is, I made weekly mortgage with additional $25 for 7 months. So $1200 mortgage down to $325 a week. The bank notified me 6 months into this said I late on 1 month. And they do not accept partail payment. Now I just pay $1300 a week prior to due date.

By: Bryan

Bryan — Fri, 18 Dec 2009 14:25:05 +0000

Patty – you have to ask Citibank what those fees are. They might be accrued interest, or escrow shortage, but you should find out from them exactly what they are. If you request a payoff statement, it should itemize everything. As far as the flood insurance is concerned, if your house is located in a FEMA designated “flood zone”, lenders will not hold a mortgage on a property unless there is flood insurance on it.

By: Patty

Patty — Fri, 18 Dec 2009 03:59:06 +0000

I want to payoff my mortgage. The Citibank wants to charge $3,000 in fees that they say is not prepayment penalties. Is this standard and is it legal? Citibank wants us to purchase flood insurance for $2,500 per year. Multiply that amount for 15-20 years and it’s obvious that its better to payoff the mortgage. But what are these fees and can I fight them?

By: Merry

Merry — Wed, 25 Nov 2009 15:32:10 +0000

Petunia, et al,

It worked! My lender reapplied the payments, saving me approx $4400 in interest. Thanks for the advice!

Thanks to fivecentnickel for a great website!

Merry

By: Merry

Merry — Sun, 22 Nov 2009 15:41:31 +0000

Petunia,

That’s exactly what I intend to do if they won’t reapply the payments. We are going to talk to them tomorrow; will let you know what happens.

Thanks again,
Merry

By: Petunia

Petunia — Sun, 22 Nov 2009 02:21:27 +0000

You’re welcome, Merry.

Also, if your lender will not agree to re-apply the payments you have already made, I suggest you stop paying your mortgage until the next payment is due in May 2010. Instead, deposit the money into your savings account, the extra payments too if you like. When your next payment is due, send the entire amount, and specify that the extra is for additional principal.

Regards,

Petunia

By: Merry

Merry — Sat, 21 Nov 2009 22:11:52 +0000

Petunia,

Thanks so much for the info. You have, unfortunately, confirmed my fears. I will do as you suggest and contact my lender. At least I didn’t get too far out on my payments! Merry

By: Petunia

Petunia — Sat, 21 Nov 2009 17:19:36 +0000

Merry,

You aren’t saving a single cent of interest with your current method. You are simply sending in future payments early. If that is your goal, that’s great. If your goal is to reduce interest paid, then you need to send extra principal with your regular payment.

Mortgages are not simple interest notes. With a simple interest note, interest accrues daily. If mortgages were simple interest, the amount of interest would vary due to how many days in the month and whether your payment had posted on the 30th, the 1st, the 4th, etc. However, as you can verify with your amortization schedule, your monthly interest does not vary at all based on days of the month or the exact date your payment posts.

If I were you, I would contact my lender and see if they won’t re-apply the additional payments you have already made. Payments received mid-month could have been held in suspense and applied as additional principal on the first of the following month. (Assuming that your goal actually was to reduce interest paid.) If they agree, then you will no longer be paid through May 2010, but you will have reduced your principal balance and the life of your mortgage.

Regards,

Petunia

By: Merry

Merry — Sat, 21 Nov 2009 12:43:35 +0000

I have two questions. I have been making an extra regular mortgage payment in the middle of every month. Currently, my next mortage payment is not due until May 1, 2010. Is this the best way to put extra money toward my mortgage, or should I be specifying the extra money to go toward principal only?

When is the best time of the month to make an extra payment? Assuming you make your regular payment on the 1st of every month, and you want to put extra money toward the principal, should you do that in the middle of the month, or just shortly before you make your regular mortage payment? I read once that the less time that has passed since the last time your account was active, the more money will go toward your principal and the less to interest.

By: joe

joe — Fri, 13 Nov 2009 22:51:43 +0000

I have a $400,000 30 year mortgage. I put 25% down and have enough cash saved up for a 7 month emergency fund. My remaining bablance on the mortgage is about $150,000. I inherteted about $100,000 that I had not expected to inherit. I plan on using a “laddering” method with 4 seperate CD’s. (6 month at 1.54, 1 year at 1.99, two year at 2.94 and 4 year at 3.05 percent. At the end of the four years I will take the full amount and apply it to my mortgage. I plan on paying extra each month on my mortgage. So essentially I wam planning on paying my mortage off in 8 years.

By: Perk

Perk — Wed, 14 Oct 2009 00:40:55 +0000

Bryan and LMoot,

With my well-funded emergency fund in place, I am diverting extra funds to paying down my mortgage debt in 4 years. After those 4 years (1.5 to go), my same emergency fund will be sufficient for covering three times the amount of unemployment than it does now.

By paying down my mortgage debt every month, I end up paying much less interest (debt) to the bank than if I paid it off in a lump sump even 1.5 years from now and certainly much less than when I began paying off that debt in earnest 2.5 years ago. It’s actually astounding to realize how much interest (debt) I avoid paying the bank by paying extra each month versus paying in a lump sum at the end. That amount far outweighs any amount over the standard tax deduction.

With a well-funded emergency fund, why pay down credit card debt? Why pay down car loan debt? Why pay down personal debt? Why pay down house debt? Because when debt is $0, then my emergency fund is worth more months of coverage and my obligations are easier to meet.

I know you are urging people to see Tax and Financial Advisors. My sister is one of those and she has paid off her house. In addition, people need to beware of financial advisors who, instead of charging a flat fee, give “free” advice and make money off of the investments instruments they steer customers to.

By: Bryan

Bryan — Tue, 13 Oct 2009 13:42:22 +0000

LMoot – thank you, I couldnt have said it better (believe me, I’ve been trying). Equity in a house is one of the highest risk places to park your money, and one of the least prudent. It has no rate of return, it is not safe and it’s not liquid. It was a good strategy 30 years ago, not today. As I’ve said before “Liquidity is Key”.

Perk – the point is to have access and control of your (home equity) money, not to get rich by investing it. And to be in a position to be able to pay off your mortgage IF you choose to when YOUR assets equal or surpass your debt. I strongly urge homeowners to involve their Tax and Financial Advisors when structuring such a strategy. I would feel much better 15 years from now knowing that I can pay my mortgage off if I want to, than knowing I have my mortgage paid off and not much in liquid assets. Also, you will be suprised at how many people give extra money to their lender every month with the goal of being mortgage-free by the time they retire only to learn that the tax on their 401k income will have to be offset to maintain their pre-retirement lifestyle, so they end up taking another mortgage (if they qualify) to get their money back out of the house.

By: LMoot

LMoot — Tue, 13 Oct 2009 11:38:04 +0000

“”"”This whole thread is outstanding. So many people are in trouble on their houses/mortgages because instead of paying the loan down over time, they kept adding to it to take out the equity. A gradual paydown would have eliminated the entire mortgage mess.

Going forward, anyone with a mortgage, or planning on having one, needs a viable plan to pay it off early. Not only will this build equity, but it will also open up more options in the future. How important is that??? – KEVIN”"”"”

The future does not always supercede the NOW. Not paying down the mortgage is NOT why people are in trouble. Not having adequate liquid savings is why people in trouble. My current mortgage is $600/month. I could pay $1000/month, every month. Then, I get fired. I have less savings than I would have if I just pocketed the extra $400 a month, and do you think that because I’ve been “paying down my mortgage” that my payments will decrease, or that they will forgive me if I’m late a month or two? Paying down the mortgage does NOTHING to secure the present (and what good is the future of your asset if you lose that asset). Like I said, I could be $400 over my mortgage until the last payment, and that last payment will STILL be the original amount of $600. Paying down the mortgage does NOTHING for my current financial situation (and less for my future financial situation) than merely saving the money and paying it off at once.

By: LMoot

LMoot — Tue, 13 Oct 2009 11:30:26 +0000

Question: Why would you gradually give your money to someone else to earn interest on? Not only removing your opportunity to invest, CD, or save it and earn the interest for yourself, but also the security of having accessibility to liquid cash?
If you know you want to pay your mortgage off in x amount of years, you should “overpay your principle” in a high yielding savings account, or ladder a CD (put a certain amount of money into a CD every 6 months-a year, for up until you plan to pay off the mortgage all at once). Of course this only works if you have the discipline to not touch the money. I can’t imagine though, WILLINGLY giving money that I won’t be able to control until I get the house sold to someone else to invest and make money off of. Why would you do that? You’re essentially giving away profit and losing money to have someone babysit your money, without paying you interest.

By: Perk

Perk — Tue, 13 Oct 2009 08:21:20 +0000

From Bryan:
“4.) For the homeowners who use the mortgage interest tax deduction– every extra dollar paid toward principal permanantly wipes out a portion of Uncle Sam’s contribution. This is a factor many dont consider until it’s too late. I strongly advise consulting a CPA about a mortgage payoff strategy.”

Also make sure to take account of capital gains taxes on investing money and then using it to pay off a house in a lump sum. No one seems to argue against investing and making money because one pays capital gains tax on those earnings. Yet people turn around and argue to not pay interest on a loan off early because of a tax deduction. The tax deduction argument is to pay out $1 to save $0.25 (or $0.33).

By: Jovon

Jovon — Sun, 20 Sep 2009 15:36:30 +0000

A very simple approach, that shaves atleast 10 years off your mortgage.

Appropriate tax refund every year towards an extra mortgage payment.
eg. 150,000 over 30yrs @ 5.5 with 20% down

say an additional 1200 in from yearly tax refund will shave atleat 10 yrs.

how about that.

By: Don

Don — Sun, 30 Aug 2009 04:34:53 +0000

Bryan, the program you are speaking of will help out in getting a better ball park figure. Thank you for the information. I will send you an email.

By: Omar

Omar — Sat, 29 Aug 2009 16:07:58 +0000

Hello Nickel;
Since ten yeras ago, I have a mortgage at 7.38% at 30 years term. On every month, I am sending and extra money for eralier pay off. So, I have reduced the in ten years the length. I have always wondering wihich will be my final interest rate when I finished to my mortgage. Can you please help to calculate it? Thank you.

By: Bryan

Bryan — Thu, 27 Aug 2009 16:35:28 +0000

Don -
As Swamproot said, it’s very situational. In my opinion, You are thinking along the right lines. If you would like, I can help you figure out which is the best approach. I use a program that will do a side by side comparison of using principal reduction vs. asset accumulation to pay off a mortgage, and all the interest costs and savings over specific periods of time. It will certainly help you and your wife make an informed decision and pursue your chosen plan with confidence. Drop me an email if you would like me to assist. I am a Mortgage, Liability And Cash Flow Advisor by trade. Because you are a “fivecentnickel”er, I will offer my service at no charge. bvail@icghome.com

By: Bryan

Bryan — Thu, 27 Aug 2009 16:03:00 +0000

Swamproot – 1.)You hit it on the head! “it is an issue that is individualized and there is no stock answer to IF you should pay your mortgage early”. It is totally situational and too many factors should really be considered for an individual to decide if it is suitable for them. Thank you… that is the answer to this forum!
2.) I really am not talking about 2 different things because they are interconnected, to compare paying off a mortgage in extra principal payments to saving and paying yourself, the liquidity factor is a big consideration ( house rich-cash poor).
3.) A HELOC is a nice way to supliment your liquidity until you have it in cash, BUT… you are borrowing the extra payments you made to your principal and paying interest on it! If you want to send me a couple hundred bucks each month and not want to earn interest on it, I’ll take it, and when you need to access it, I’ll charge you interest and if you don’t pay that interest, I’ll own your house. Deal?
4.) For the homeowners who use the mortgage interest tax deduction… every extra dollar paid toward principal permanantly wipes out a portion of Uncle Sam’s contribution. This is a factor many dont consider until it’s too late. I strongly advise consulting a CPA about a mortgage payoff strategy.
5.) The rules have changed!! Granddaddy had a pension, he had no credit cards, he kept the same job and lived in the same house for 30 years, college costs were so reasonable, he paid cash, when he retired, he did not need a tax write-off because his pension and social security covered everything. Paying off the mortgage was definately the right thing to do 20 -30 years ago. And he got a gold watch to boot : )

By: Don

Don — Thu, 27 Aug 2009 04:25:46 +0000

Bryan, I have also been thinking of that. Saving it till the 10 year mark and paying the remaining balance. I have looked around a little at diff options to save money and earn more interest than what my mortgage payment is. Even if I saved the money in my account and only earned a little interest, I’d still have a safety net for the unexpected and the diff will be minimal anyway. The emergency fund is an absolute must. We have gotten rid of almost all unnecessary frills. If we want to do something pay for that use instead of months where you don’t use it. I work with a couple folks that have cars, trucks and RV’s with grown kids back at home (whole other issue) but I see too many stretched too thin and set up for failure. As I explained this to the wife, we pay off in 10 and have 20 to continue to save at a higher rate or let her stay home or we continue and the way we are and be done in 30. We can be virtually debt free in 10 years and early 40’s by then or be like a lot of others here struggling and not being able to enjoy life at retirement. Thanks again Bryan for the info in all the posts, it got my rusty wheels spinning and thinking again.

By: Swamproot

Swamproot — Wed, 26 Aug 2009 18:29:42 +0000

Bryan, MY way of thinking would be not to buy a house at the top of a bubble.

But I think you are talking about two different issues. ONE of them is about having the liquidity to survive for several months if you lose your job. This is what the Ramseyites call the Fully Funded Emergency Fund. Don should absolutely save enough cash on hand to handle that contingency. I and I don’t think most people who advocate paying off your house early would argue against that point.

But MY house hasn’t really gone down in value, in fact I’m pretty sure I could sell it for more. I can qualify for a HEL or HELOC if I need it. I can lose my job and my wife can still make the mortgage. In a few years, MY house will hopefully be paid off early, and I will no longer be mailing a substantial portion of my income off to never be seen again. I will at that point have a whole lot less to worry about, certainly less than the client of your associate. But I will concede that it is an issue that is individualized and there is no stock answer to IF you should pay your mortgage early.

I don’t think the rules have changed. If you buy what you can afford, prepare for emergencies, save money, don’t spend more than you make, then you will still be OK. Just like granddaddy use to say.

By: Bryan

Bryan — Wed, 26 Aug 2009 17:04:22 +0000

Swamproot – It’s not about earning more than the interest you are paying. It’s about liquidity and having control of your money. There have been very detailed studies on saving vs. paying extra pricipal and saving always came out better. Equity is not always accessable, in fact it’s the worst place you can put your money. A recent example, aclient of an associate of mine bought a house 2 yers ago for $800,000. He put $400,000 down and took a $400,000 mortgage. The house was recently valued at $400,000. His hard earned down payment is GONE. If he put $160,000 down, and saved the difference, he would now have $240,000 in the bank. Sure, he’s upside down, but at least he’s liquid. Now what if he loses his job? He has no equity so there’s nothing to tap into… it’s GONE. In the second scenario at least he has money to survive and cover his costs while he finds another job or figures out his next step. AND if he was not upside down… he cannot tap into the equity because he doesnt qualify to BORROW IT BACK. Your way of thinking is the reason so many people have lost their homes to foreclosure in recent years. But It’s understandable because that’s the way we have been conditioned to think. The mortgage one selects and how they manage it will have far-reaching impact on their personal and financial well being. It really has to be worked into the overall financial strategy and not treated as a compartmentalized obligation. The rules have changed… we have to stop living by the money rules that our parents and grandparents lived by. It’s a totally different environment.

By: Swamproot

Swamproot — Wed, 26 Aug 2009 16:34:26 +0000

Bryan, you speak of paying off principal like its throwing money down a well, saying it “is lost forever”. But that isn’t the case, it removes the liability that the principal dollar represents. Unless the rate of return on the money you save is greater than the interest rate on your mortgage you couldn’t have more money left over. To earn better than mortgage interest rates of return, you would probably need to put the money you are saving into something illiquid or volatile, or else it would be a more obvious thing to do. Equity in your house is something you can tap if you need to and having it is like having insurance. Of course the same can be said about a big pile of cash. But by not paying it on principal, you ARE letting it grow for the mortgage company.

By: Bryan

Bryan — Wed, 26 Aug 2009 15:06:13 +0000

Don – The $1,400 a month you are now saving will go alot further if you kept saving it every month and continue to EARN compounding interest for the next ten years, THEN pay off the mortgage. I dont know your specifics but you will probably have money left over after paying it this way. This would really be “paying yourself first”. As I’ve said it prior posts… “saving” interest is not the same as “earning” interest. Keep total control of your money. Every extra dollar you pay toward principal is lost forever (until you sell or refi). Unless you are liquid enough to cover your living expenses in the case of an unforseen financial setback, I urge you to truly pay yourself first. $1,400 a month can grow substantially…. let it grow for you, not your mortgage company.

By: Don

Don — Wed, 26 Aug 2009 05:22:49 +0000

My wife and I refied and since the orig lender messed up the escrow, we will now save little over 400 a month. We are paying what the old rate was and now that the kids are out of day care and private school to public we are using the additional 1k a month in a savings for 6 months and paying 3 at a time and should knock the 30 year to about 10 and still give us money to fall back on if needed. We should save about 160k in interest. lay low for 10 and enjoy the remaining 20. We got rid of all the unneeded things and work with what we need and adjust as we go. Stop paying others and pay yourself…

By: Petunia

Petunia — Fri, 21 Aug 2009 19:29:04 +0000

Linda @ #50,

Are you specifying that the extra funds are for principal reduction? If not, you should start.

Call Citi Financial and tell them you intended those extra monies to be applied to your principal balance and ask nicely to have this corrected. Don’t take “no” for an answer.

By: Linda

Linda — Fri, 21 Aug 2009 17:45:19 +0000

We think we are getting cheated by Cit Financial on our mortgage. It said on the back of our statement that any amount made that was over the amount of the monthly payment would go to principal….we have been paying a little extra each month…nothing went to principal. When we asked about it they told us they “don’t work it that way”….anyone have a problem like this? only one time did our principal drop (we paid early) and they told us we can’t pay payments earlier than every 30 days. WHAT?

By: Bryan

Bryan — Tue, 18 Aug 2009 00:03:46 +0000

Mark – Very nice!! Do you have sufficient liquid funds to cover you inthe case you lose your job? If so, you’re in great shape. Otherwise you might consider putting the $250 towards that. In 2 years, even if you stuck it in the mattress, you’d have $6,000 that you cannot access if you used it for principal paydown.

By: Mark

Mark — Mon, 17 Aug 2009 23:30:17 +0000

I have a 40 year mortgage with a variable rate of .65% below prime. I went for this last year due to the fact that my payments were low. Most people would spend the saving, but I put it against the mortgage. Putting an extra $250 against the principle. I did this for 2 reasons. One is that if I lost my job I could stop the extra $250 and get my life back online. And the other due to the fact that I know the amount of $250 is hitting the principle. I watch my finances and I am very happy I did it this way.

By: Bryan

Bryan — Mon, 10 Aug 2009 22:31:15 +0000

jj san – You are probably hearing about one of the Money Merge Account type products. They set you up with a Line of credit from which your income is deposited to and all your bills are paid from. They also provide you with computer software to manage and monitor it. From what I’ve seen tey do work, owever you need alot of discipline to work it successfully. Some people swear by them and some hate them. I suggest you research it, look at some of the video presentations they offer and see if it is for you. The more opinions you get on this one, the more confused you will get. You have to decide based on how it fits you. By the way, many of these companies charge for the software, I’ve heard $3,000 +, but not sure. And if you can cut 22 years off your mortgage, it’s well worth it. Good Luck!

By: jj san

jj san — Mon, 10 Aug 2009 03:28:23 +0000

does anyone out there have any experience working with any of the websites promising that you can pay off your mortgage in 8-12 years and it not involve any bi-weekly or extra annual payments? jj san

By: Bryan

Bryan — Fri, 26 Jun 2009 03:45:37 +0000

“Cash is King” and Liquidity is Empowerment!!!
I can’t say it enough….. if people managed their finances to build a proper level of liquidity, I would bet that around 70% of the foreclosures that happened over the past year and a half, would have been avoided.

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Fri, 26 Jun 2009 01:09:38 +0000

Bryan, your answer at post #34 was equally brilliant. Liquidity is an important consideration when making extra payments on a mortgage. Once paid, the cash won’t be available for other purposes, especially now that mortgage money is harder to get than in the recent past.

By: Bryan

Bryan — Fri, 26 Jun 2009 00:55:51 +0000

Great answer Kevin! You are absolutely right.
Gloria – the correct answer to your inquiry can only be given after someone you trust reviews your overall financial situation. If anyone tries to give you advice on what to do without thoroughly understanding the above, don’t take their advice, it’s as good as one of those Eight balls that you shake and turn over. Good Luck !

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Thu, 25 Jun 2009 23:28:15 +0000

Gloria, you’re looking for a yes or no answer of course, but the only answer that can be given without knowing anything about you or your circumstances is MAYBE. There are about a dozen questions that need to be answered before anyone can provide any reasonable guidance on your situation.

You probably need to discuss this with an attorney, accountant or other trusted financial advisor, preferrably one who knows you and your situation fairly well, and doesn’t stand to benefit from your decision.

Age, employment and income, assets, assets after loan payoff, future intentions, family situation, future cash needs, non-mortgage debt and other questions all need to be addressed before anyone can give a yea or nay opinion on the payoff, and you certainly don’t want to be sharing any of that on the web. Good luck!

By: gloria

gloria — Thu, 25 Jun 2009 22:37:13 +0000

my mortmage balance is $89.000 and i am thinking to pay it off total, but i am not shure if this is the smart thing to do, my monthly payment is 667,70 do you have any sugestion on this and if so, what would be a better way to make profit out of the $89.000 as of today is just in a money market acct.

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Wed, 10 Jun 2009 19:37:19 +0000

This whole thread is outstanding. So many people are in trouble on their houses/mortgages because instead of paying the loan down over time, they kept adding to it to take out the equity. A gradual paydown would have eliminated the entire mortgage mess.