Anyone paying extra to their mortgage? - Page 3

Snoopy2645 · #41 (**permalink**) 02-12-2006, 09:57 PM

I pay extra whenever possible I truly want my mortgage paid off. We are paying almost 8% & I hate it. ANd I really want to know whatever happens I will always have a roof over my head!! I dont know why but my biggest fear in life is being homeless.

Tree0164 · #42 (**permalink**) 02-13-2006, 04:52 AM

We are going to pay some more extra since our escrow account payment each month went down by $80. We were paying an extra $50 each month towards it before. Now will be an extra $130. Yeah!

PrincessPerky · #43 (**permalink**) 02-13-2006, 05:00 AM

I get to join this club soon! we decided to get life insurance then use any extra torward the house.

PennyPincher · #44 (**permalink**) 02-13-2006, 07:45 AM

I pay an average of $150 extra per month. Some months it's $100 - and others $200. This works out to one extra payment per year, which will help pay it off early.

Although...I'm not sure I should be doing this. Is this something that everyone should do, or only people that plan to stay in their home for a long time? I will likely move within 2 years... but it makes me feel better to make a larger payment.

sweeps · #45 (**permalink**) 02-13-2006, 08:05 AM

How long you plan to stay in your house is (probably) irrelevant. By paying down your mortgage faster, you're increasing your equity in the house which you should be able to apply to your new house.

Paying extra on your mortgage is not something that everyone should do. The effective interest rate on your mortgage is usually much lower than you can get through extra retirement savings or especially by reducing credit card debt.

Of course there are 1,000 other variables to consider. What will you do with the money if you don't apply it to the mortgage? Are you paying PMI? Will you psychologically be better off with your mortgage paid off than with higher retirement savings? etc. etc.

Lostsoul33 · #46 (**permalink**) 02-13-2006, 07:11 PM

I'm not paying anything extra to my mortgage as I'm working getting rid of credit card debt and establishing a savings account. My rate is fairly low (4.9) so it's not a huge concern for me right now.

Ima saver · #47 (**permalink**) 02-16-2006, 02:38 PM

I have been paying $1000 extra on my land mortgage every month. that has really helped in keeping the interest cost down.

Pickle73 · #48 (**permalink**) 02-17-2006, 08:28 AM

we do like $20/month. We just bought our house and are adjusting to the new payments in our budget etc.. I know we should try to pay more, esp now so new, but ahh, one day!

At this rate we'll pay off, oh 3 months early. lol

Ima saver · #49 (**permalink**) 02-17-2006, 08:46 AM

Pickle, every little bit helps. I have always loved been house mortgage free. Even when we went thru a patch of a few bad years (money wise, trying to start a new business that did not work out) I always knew my house was paid for.
When we built this house, we were a liitle bit short of money (all new houses cost more than you plan) so I had to get a mortgage. I paid it off in less than 3 years. I did anything I could to come up with extra money to pay on that mortgage.
For my husband's birthday, I got him a t shirt with a picture of our house on it and the saying "my house and it's paid for" as a surprise.
He did not know that I had paid it off!!

LuxLiving · #50 (**permalink**) 08-19-2006, 10:28 AM

Neat gift Ima!!

Yes, I am paying off a bit at a time. Sweepsplayer has it down right. It isn't always the best for everyone. I too like the thought of no matter what I've got a home. I acknowledge this as 'depression era' thinking. I didn't grow up then but my parents sho'nuff did! Banks rarely boot you to the curb anymore - they don't want your real estate necessarily. They want to be paid back.

I did the biweekly automatically for a tiny bit w/Countrywide. However, I was never comfortable w/their accounting of it so I cancelled and will go back to doing it myself.

-LuxLivingFrugalis
Inch by Inch life's a cinch!

There are many strategies for paying off early - try locating this book - I think the title is - Debt Reduction Strategies by John Avanzini {that may not be the correct spelling on his name. Lots of good ideas there.

Ima saver · #51 (**permalink**) 08-19-2006, 10:41 AM

There is another neat book that motivates you to pay off early, it is called "Banker's Secret" and it is writtenby Marc Eisenson. You will be amazed at how much money you will save.

pearlieq · #52 (**permalink**) 08-19-2006, 12:10 PM

We don't. It's not really a priority now. If there came a point in the future where I had extra money and my student loan debt was gone, I might consider it, purely for the psychological benefit since I could probably make more by investing the extra money in a taxable account.

If we have kids, I might try to bump up the schedule a few years just so we're done with the mortgage by the time the first one goes to college. I can imagine the extra cash flow each month might be nice to have at that time!

greedy4chips · #53 (**permalink**) 08-19-2006, 12:22 PM

Quote:

Originally Posted by mom-from-missouri

I currently am doing $25 a month extra. I also have mine electronically paid each month, buy having it put on my ATM-credit-debit card, as a credit. it still comes out of my checking account, I pay no intrest on it--BUT, I earn reward points, which at the end of the year I get as cash deposited into my checking account by my bank. I then take that cash, and also apply it to the mortgage.

We are paying extra so the house can be paid off by the time our kids get to college. I wish our bank allowed payments from a credit card so we could recoup the extra 1% rebate!

For me, I want it paid off so I have choices in life and not be forced to make a tough choice when you lose a job or whatever may come your way.

Fizgig · #54 (**permalink**) 08-19-2006, 01:14 PM

I've chosen not to pay extra to my mortgage of the time being.

I'm young (29), and it's more important to me right now to build my liquid savings and emergency fund. It just isn't the right choice for me to tie up all my assets in home equity. It's true that if things got bad and I had more equity I could take out a home equity loan, but then I'd be dealing with another bill in hard financial times with potentially high interest attached.

I was fortunate to get a low interest rate at 5.5%, which is effectively less with the interest tax deduction. I'm earning 5% on my savings (effectively less because it's taxed). There might be a 1%-ish benefit in putting the extra cash towards my mortgage, but the sense of security in having the rainy day cash socked away is worth it.

It will probably be a long time before I consider paying extra on the mortgage, truth be told. First I'll establish my 6 month emergency fund (which will probably take another year), then I'll start fully funding a Roth IRA in addition to my company 401k, THEN I'll accelerate my house payments.

Ima saver · #55 (**permalink**) 08-19-2006, 02:22 PM

Fiz, as much as I love being mortgage free, it is important to get your emergency fund and roth ira going also. You have a pretty good rate, too!

LuxLiving · #56 (**permalink**) 08-19-2006, 02:30 PM

You are absolutely right Fizgig at your age and mortgage rate you are much better off getting that Emergency Fund fully padded and those other accounts fully funded! How smart you are about your money! Wish I'd of been that clued in at your age.

This is why Sweepsplayer is right on the money -- the answer depends on each persons special circumstances. We are facing retirement soon so we'd like ours paid off by then. Our extra few dollars a month are split right now between retirement funding & mortgage payoff...our two biggest priorities.

Ima saver · #57 (**permalink**) 08-19-2006, 02:32 PM

Lux, I love your avatar! It is perfect!!