House Mortgage -- Countdown

[Randomsaver]

My monthly interest expense went down from $301 on 6/1/2016 to $278 for 9/1/2016. That is $23 payment swing to the side of principal reduction.

I"d be very ecstatic once my expense goes down below $200. That would be a hoot.

My monthly interest expense went down from $278 on 9/1/2016 to $252 for 1/1/2017. That is $26 payment swing to the side of principal reduction.

[Nutria]

The magic number I think is $80K. Once we cross that border down, life becomes easier.

Out of curiosity, why?

[amarowsky]

kinda glad to see this post still getting a lot of traction.

I plan to be updating mine fairly routinely from here out, as I have decided to set my greed aside and use my dividends to pay off my debt instead of reinvest.... It may not be the wisest move in terms of growth, but I have let them roll into one another for all too long.

I have re-directed all of my monthly dividends/distributions to go directly into a savings account for staging, and then all extra money will go towards paying off debt (beyond bills and minimum preferred level of checking account).

New funds going toward principal:
-$500
-$200-500* I will see what my extra monthly income surplus will be.
-$600-900 *Wife's monthly surplus TBD as well, she just started a new job.

Total Debt:
House -$66/75K @ 3.5% 13/15 Years on loan
(2) Cars -$29/31k @ 2%


No other debts. I'm planning on working on the house first, because of the higher % interest (even when considering the tax deduction).

Here we go.... Wish me luck! Any advice, wisdom, or comments would be great as well.

[~bs]

meh, I have like 19 years and 200k more to go. Not really prioritizing paying down the mortgage because I have a 20% credit on mortgage interest paid plus can still Sch A deduct the remaining interest + property tax cost. I did make a bunch of early payments earlier on in the mortgage life while the interest per payment was pretty high and ridiculous.

Focusing funds on saving and investing instead. Mortgage at 3.8% is pretty much my only debt.

[MooseBucks]

Mortgage Principal - 177,324
Payments Left - 187

[Randomsaver]

Focused Debt : $22K

Focused Debt : $21K

[Gailete]

Randomsaver, are you making any payments directly to principal over and above your required monthly payments? The real issue is how amotorization tables work, interest is front loaded. To make matters worse, most mortgagees seem unaware that their monthly payments also include property tax, some include mortgage insurance [PMI} and some even include ordinary house insurance. Check your documents to determine terms and conditions to add a separate payment directly to principal. Creditcardfree on SA Blogs is doing an incredible job of moving all extra sums to her relatively new mortgage principal where small bites are reducing her principal in big chunks.

It may not seem like much initially but I was gobsmacked when I discovered that intermittent, small sums applied directly to principal cause a 30 yr mortgage to be paid in full in 13 years and the real benefit was how much it saved in interest. Cost avoidance is not easy to track but it sure makes a difference in total outgo.

So very true! My bank's website was revamped a couple of months ago and I was able to start seeing how much went to principle and interest each month with at least all of last year's payment breakdowns showing. The two loans for our rental property also were showing and they hadn't even been available for me to see on line at all. previous to this. I also started paying our car loan via the internet and was able to see just how little we owed (payoff should be 6-20-17). That got my brain churning as one of my goals for this year is to get us straightened around again financially and on a good financial path. Last year my husband was unable to work for a good 9 months and as a self-employed person, no sick benefits. So many things landed on credit cards, such as property taxes and estimated tax payments, etc. But this year I wanted to wipe them out as much as possible.

I'm in the process of setting up excel worksheets for each loan or credit card so that I can track how we are doing. Especially when I can make extra payments. One of the best things was being able to make double payments except for the mortagages so far this month and when the regular due date arrives, hoping to have yet another payment going in. So we have one less car payment to make at this point.

It was my house mortgage that was the most astonishing. When I saw all those payments in a row, I saw how the different amounts of days in the month affected the interest - the more days the more of the payment that went towards interest. We have 13 years to go on it, yet the interest is still bigger than the principal. I get SSD and when I get my check (for me at the end of the month) I transfer the mortgage money into a savings account where it sits until the 24th when it is used to pay the mortgage. So here is the scenario for this past week. On the 24th they took out the payment that had been sitting in my account since late December. On the 25th I got my SSD and that was the day I was being gobsmacked by the chart of how the payment was divided. So I marched myself down to the bank and talked with the manager. He pushed up my next payment to the 26th, and has us now set up for the mortgage to be paid on the 1st of the month, since I get my check on different days of the month, we know that I well have it at that point. The surprising thing? Our payment on the the 26th, all the payment but $24 went to principle because we had only two days for interest to be charged. It will be interesting to see how changing the payment date 3 weeks sooner will affect the mortgage and it is easy now if I want to make extra principle payments to make them. So currently our mortgage is $68,000 and I hope to have it paid off much sooner, but first we have to chip away at the credit card loans and get the car paid off.

While I wanted to set the car payment (when paid in full) away towards saving for our next car as the one we drive now is 10-11 years old, hubby wants me to get our rental property paid off sooner. My feeling on that is currently the renter's payment each month more than covers the loans on it, I'd rather let them continue and use any extra on the credit cards bills. Both of us hate being in debt like this. But we are hoping this will be a much better year financially than last. My ex-husband got us in $42K worth of debt in the first year and a half we were married over 20 years ago. We are nowhere near that debt level at this point, so it very much helps to have a spouse that believes in being debt free, even though at times we have had to resort to debt.

One thing I have been doing is making payments or partial payments as soon as I have some money. Some credit cards don't mind us making multiple payments throughout the month, but one of them only allows 3 per month so I have to be careful about that one. If you pay your card in full each month, this doesn't matter. But if you have a balance and only can pay a certain amount, each day that the money is there in your account is that much less interest you don't pay and the sooner the bill is paid off. With most banks and credit cards being online this is convenient to make extra or several extra or at least early payments and save on interest. Rounding up your payment also helps - may just be a little bit, but when I'm really short of money, I still round up payments to the nearest doallr, or the nearest $5 or $10 etc.

I don't know if it is doable yet as we don't have a big income, but I really would like to see those bills and loans paid off within 5-6 years. Once the house is paid off and rental income is free and clear, we will be in much better shape to handle big bills.

[greenskeeper]

$1500 additional principal payment this month

[snafu]

Gailete, terrific that you can track rental mortgage balances on-line. Better yet, DH is onboard and you are both working toward the same goal. Brilliant to discuss changing mortgage payment day and taking action so that it better
meets SSD income ultimately reducing the amount of interest on the long term of a mortgage.

I can't imagine a CC that limited payments. Is that legal? Have you considered transferring to a no fee, 0% card? So many of us use our bank's free, online bill paying service to pay small sums when $$ are available because as you mention, it reduces the over all interest. When ill, I spent a portion of each day reading frugal tips/hacks and ways to reduce costs. Of all the tricks, I found meal planning my biggest success. It sounds petty but I challenge myself to reduce costs to pay for extras.

[Gailete]

I can't imagine a CC that limited payments. Is that legal? Have you considered transferring to a no fee, 0% card?

That is my 0% card . Unfortunately, one of the charges didn't get paid off on time, due to my husband not being able to finish a job last year when he couldn't work, but between a job he just finished AND our tax refund which I'm sure will be fairly big that part should be paid off soon. We had been paying estimated taxes as if the project would have been finished and when it wasn't, his income was in the toilet so to speak so we will be getting most back.

When ill, I spent a portion of each day reading frugal tips/hacks and ways to reduce costs.

When I was super sick my first year before they knew what was wrong with me (rheumatoid arthritis - severe out of the gate) I managed to start a business! I still work the business and it helps stretch that SSD check. It is my occupational therapy. Until I have done a bit of keyboarding in the morning and the motions to pack up my orders for the day, it limbers me up enough to start moving befoe that I'm the Tin-man. I started the business by selling off a lot of my sewing books since we literally thought I was dying. I didn't die, and the business grew. I can tolerate sitting in a chair with my feet up, and do the keyboarding, but housework is almost impossible and my son has to help me with groceries. Cooking is really hard as I can only stand for 2-3 minutes without excrutiating pain. But like you I read up on every single thing I can find to reduce costs. Reducing costs can have a bigger impact on limited income than even making more as my husband is self employeed and we have to pay tax and full SS on every bit of income that comes in. No paycheck deductions or employer paying half the SS. Some of the reducing cost things I have found routinely save $25 a year which doesn't sound like much, but it adds up year after year. I pay most bills on line thus saving a stamp which I have figured saves us at least $25/year.

One thing I am finding is each year I try to keep better and better records so that tax time is a piece of cake. This year I got a free copy of TurboTax from the Amazon review program that I work with, doing reviews of products that I then get to keep. In this case I found that I always want my tax software in December so as the tax paperwork floats in, I can input it into the taxes and by doing that I think I'm around half or more done already. Which means I think I will be done in the next week or two so our refunds will come sooner. Those records also help to see where the money is going and is there anything else we can do to save.

I am looking forward to getting these bills paid!

[Randomsaver]

Out of curiosity, why?

It's just something I see that can be paid off within 5 years.

[Randomsaver]

I am looking forward to getting these bills paid!

Go for it Gailete! Feel free to track your house mortgage down here.

[Randomsaver]

Focused Debt : $21K

Focused Debt : $20K

[JoeP]

Focused Debt : $20K

You're killing it!

We're at the same place, but are not paying extra since it is near the end and the interest component of the payment is very low: P=979, I=73, E=554.

[Randomsaver]

You're killing it!

We're at the same place, but are not paying extra since it is near the end and the interest component of the payment is very low: P=979, I=73, E=554.

Haha I wish. I still have more than $100K that I just count down instead the amount I think I can focus to pay this year.