Paying off Mortgage early????

[Tink-n-MrIncredible]

I have read several post where people stated that they just paid off their house. Some have even posted that they paid it off early. How did you do it? I know by paying extra principal each month. Did any of you set a goal date, if so how did you accomplish it? How did you determine the amount extra you put each month if applicable? I am trying to pay off my mortgage. I also pay extra each month. What is a good free mortgage calculator out there that has bi-weekly payments and extra principal payments? Thank you for taking time to read my post. I hope I can get some good suggestion that will help me and maybe someone else who reads this.




Happy Easter

 

[meriface11]

bankrate.com has a great early payoff calculator.

 

[Gr8t Fan]

http://www.mortgage-x.com/calculators/extra_payment_calculator.asp

I like to use this calculator because it allows the input of extra principal monthly as well as a lump sum.

We'd always paid an extra $225 a month on our mortgage and almost a year ago were tweaking our numbers, using different inputs in the calculator, and realized if we really buckled down we could have our mortgage paid off in 16 months. It was like an epiphany! Our payoff date always seemed so far off in the future that it wasn't attainable, but 16 months was definitely doable. So we directed the extra $$ toward the mortgage and have just 10 months to go. Of course, if we'd taken a 15 year mortgage instead of a 30 year in the first place, it would already be paid off, but you live and you learn. We started out at a 30, refinanced to a 15 and then a 10 year. In hindsight, the most important advice I would give anyone is to take a 15 year mortgage as opposed to a 30 year. Good luck!

 

[Liltx]

We actually refinanced to do it and rolled the fees into the new loan minus the $5,000 the gov gave us through making home affordable. The rates were super low on a 15 year fixed and we took 10.5 years off our mortgage for only $56 more a month on a $232,000 loan. This was Jan 2010. Crazy right?! We don't even feel it. We plan to stay in this house (our third) forever otherwise we wouldn't have bothered. If it's your first house and you did FHA you can do it for free. We did this two times in our first house.

BTW- I totally think making home affordable is a joke of a program. They are only helping those of us who don't need the help. We had no loss of income or need. The people who need it aren't getting the help. OK, climbing down off my soap box.

 

[mrspopeye]

We refinanced from a 30yr to a 15 yr witha slightly lower interest rate and pay just a little more each month, which is hardly noticeable. Saved thousands in the long run.

 

[DawnM]

We would love to pay off our mortgage in the next 7 years (currently 13.5 years left) but at this time we just don't see any way to do it.

We did refi to a 15 year at 4.37% though, and we are good with that for now.

If you can make it work, I would go for it.

Here is the calculator I found:

http://www.mortgage-x.com/calculators/extra_payment_calculator.asp

Dawn

 

[Molliday]

We're closing on a new house next week. We're financing for 30 years, but are paying it off in 16 years, which will coincide with my husband's retirement.

We went ahead with the 30 year, since our income fluctuates. I didn't want to be tied down to the higher mortgage monthly, when it would be easier for us to make a lump sum payment towards principal each year.

For us, it's $2k a year.

 

[lakelandgal70]

We were blessed with an inheritance so that is how we did it. Otherwise we would still be paying.

 

[Jeff_G]

Really the first thing to do is create a written budget of your income and all your expenses each month. Figure out how much extra income you have left, then figure out what all your goals in life are. For example contribute to your retirement account, kids college fund, new car fund, paying off mortgage…

After you are debt free, I recommend putting 15% of your income into retirement, then if you have kids putting what you need to into their college fund, then pay what is left towards the mortgage.

 

[RachaelA]

We budget an extra $100 a month so we end up making a little over 1 extra payment a year. This supposedly cuts a bunch of years (maybe 7-10?) off the loan. The extra monthly amount we pay is factored into our budget.

 

[ceecee]

We just paid off our second house, both times we just added principal whenever there was extra $. Income tax refunds, bonus, etc.

 

[4orm]

When we got our new mortgage in 2009 we started paying an extra $100 per payment (bi-weekly). Our 25 year mortgage now says 16.3 years when I log into my online account. That's pretty awesome. I think we might add more each payment when we redo the budget since knocking down the mortgage has become my favorite pastime.

 

[ilovepete]

I would love to pay off our mortgage early! That would be great. Did you guys have to pay closing costs for the refinances?

 

[RachaelA]

I would love to pay off our mortgage early! That would be great. Did you guys have to pay closing costs for the refinances?

We did when we refinanced. Sometimes you can roll it into the loan.

 

[jgates]

If you do not have a long term loan and only have a 3 year or a 5 year balloon, MAKE SURE that when the time comes up to refinance again that the bank calculates your new payment based on what the remaining term would be with what you have prepaid. Otherwise they might just recalc using the original term & drop your payment way down instead.

 

[seashoreCM]

If you do not have a long term loan and only have a 3 year or a 5 year balloon, MAKE SURE that when the time comes up to refinance again that the bank calculates your new payment based on what the remaining term would be with what you have prepaid. Otherwise they might just recalc using the original term & drop your payment way down instead.

This can also happen with adjustable rate long term non-balloon mortgages. At the adjustment point the bank refigures not only the rate but also the payment to make the whole loan run the entire 30 years or whatever.

Quick calculation you can use to get back on the early payoff schedule. When you first began the early payoff schedule the monthly payment was divided three ways: (1) interest, (2) a piece of principal the bank computed, (3) amount above that that you decided to pay as extra. After the bank adjusts the rate, it gives you your new monthly payment amount, and also tells you a new (1a) interest and a new (2a) principal. Add your old (3) amount above that to get your new full monthly payment. Note that (1) and (2) change every month but ignore that.

 

[QVCshopper]

We paid ours off early. We got it in 2002 and paid it off in 2006, just after having our son. We did it so we could easily live on one income and I could stay home with the kids. We paid it off by paying more each month as well as using a bonus that each of us used to get at the company we worked for. The bonus was equal to 30% of your salary once you worked there long enough. The bonus made the pay equal to other companies, so we were living well well below our means. We also made some money selling our condo. That's how we did it.

 

[crisi]

I have read several post where people stated that they just paid off their house. Some have even posted that they paid it off early. How did you do it?

For the most part, we used "extra" money - stock options, bonuses from work, an inheritance.

We also paid a little extra every month.