Paying off mortgage more quickly

[torinsmom]

I am in the process of paying off all my credit card debt (about $12,000) Anyway, it looks like I will be done somewhere around May 2013. So after that, I would like to put the $ that I was putting towards the debt towards my mortgage. It will amount to about 9 extra mortgage payments each year. Is there a way to find out how much more quickly my mortgage will be paid off if I do that?

Marsha

 

[golfgal]

Something to think about, if your mortgage rate is say 5% and your investments are earning 8%, it makes more sense to put that money into your investments then pay your house off early. Now, there is something to be said for paying off your house early though. If your interest rate is more than 5.5%, rates are back down again and you might want to look into refinancing if you can--you can roll those high credit card balances into your mortgage and pay 4.5% instead of 15-20%.

 

[perdidobay]

Some websites like bankrate.com have amortizing calculators that let you put in extra principal amounts to see how it brings your loan balance down over the years.

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

 

[Muushka]

Try www.bankrate.com and go to the calculators. There is a 'sweet spot' for adding extra payments. It depends on where you are in the mortgage, how much you owe, your original mortgage length.

We once spent several hours with these calculators trying to find our spot. It was $200.00 a month extra. But that was for our circumstance.

A few years ago we were putting a bunch of extra money on the house monthly. (We had re-financed and didn't have a 'sweet spot'). After the huge stock fall in 2008 I was glad we had not put it into the 401s.

Edited to add that after the fall would have been a great time to put that money into the 401s (but layoffs prohibited it).

 

[torinsmom]

Some websites like bankrate.com have amortizing calculators that let you put in extra principal amounts to see how it brings your loan balance down over the years.

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

Thanks! Looks like I could pay it off in 7 years that way! Of course, that is using today's balance, not the one in 3 years when I start paying extra.

To the PP, I don't want to put my credit card debt into my mortgage in case something happens and I can't pay as much. That is why my mortgage is more right now than what my house cost 10 years ago I refinanced to get money out to pay off some remodeling and some debt. Now I am back in debt again. I am smarter this time though and have a plan to get out and get ahead of the game.

Marsha

 

[daughtersrus]

I am in the process of paying off all my credit card debt (about $12,000) Anyway, it looks like I will be done somewhere around May 2013. So after that, I would like to put the $ that I was putting towards the debt towards my mortgage. It will amount to about 9 extra mortgage payments each year. Is there a way to find out how much more quickly my mortgage will be paid off if I do that?

Marsha

Here is an on-line calculator that you can plug in your numbers and it should give you a better idea.

http://www.dollartimes.com/calculators/early-mortgage-payoff-calculator.htm

 

[Muushka]

Oops, I was watching TV and didn't post mine till after the first recommendation for bankrate! Sorry

 

[RachaelA]

Try www.bankrate.com and go to the calculators. There is a 'sweet spot' for adding extra payments. It depends on where you are in the mortgage, how much you owe, your original mortgage length.

We once spent several hours with these calculators trying to find our spot. It was $200.00 a month extra. But that was for our circumstance.

A few years ago we were putting a bunch of extra money on the house monthly. (We had re-financed and didn't have a 'sweet spot'). After the huge stock fall in 2008 I was glad we had not put it into the 401s.

Edited to add that after the fall would have been a great time to put that money into the 401s (but layoffs prohibited it).

Yeah we knock off 10 years with an extra $200 a month, but only 12 years with $300 a month. I guess we'll be putting an extra $200 on it! Our first payment on our new house is due in July. Eek!

 

[Muushka]

Yeah we knock off 10 years with an extra $200 a month, but only 12 years with $300 a month. I guess we'll be putting an extra $200 on it! Our first payment on our new house is due in July. Eek!

Same sweet spot! Good luck!