House Mortgage -- Countdown

[Gailete]

Oh man... I'm about to start my first mortgage countdown from scratch. Currently in the process of closing on a house for $630k. Only putting down 5%, but not to fear, my lender doesn't require PMI as long as I put down at least 5%. I opted to only put that down because I wanted more cash free for renovations that we want to do on the home (some immediately and some in the next year or so as we save up more money).

Meanwhile, the plan will be to pay the house off faster than the 30 year mortgage anyway, and the house payment is well within my means, so I'm happy with the deal. As a bonus, my b/f and I are renting out part of the house to a good friend of his that currently is his roomie in b/f's townhouse (that he will subsequently rent out now that they're all moving in with me). So the money we get from our roomie will just make paying down mortgage debt (and rebuilding savings) that much easier!

While I'm not thrilled to take on a mortgage, I'm thrilled to now own a house where the monthly mortgage (plus taxes, etc) is still significantly cheaper than the rent I pay for my 1 bedroom apartment. And while my commute to work will be a bit longer, I can still walk to public transportation so I'm not suddenly driving to work and I can just continue to read on the metro like I do now.... just for a bit longer.

Can't even conceive of that amount of a mortgage. In our area, that kind of money would get you a 5-6 BR, 3-6Bath, jumbo house! Hope all goes will with that. I think the kicker is what you are paying for a 1 bedroom apartment. My son has a 1 bedroom apartment for $350/month. He wants to move to be closer to work as soon as he can afford it. Amazing how prices go in different parts of the country!

Good luck paying it off.

[breathemusic]

Wow, I WISH I could get a 1BR apartment for that kind of money. I pay $1900 a month plus utilities now, and that's not even the high end for a 1BR, more like mid-range. The house on the other hand, IS a 5BR, 3.5 bath house that is 4,000 square feet, so I'm definitely getting some bang for my buck (granted, the kitchen and bathrooms are original to the 1998 contraction so we'll eventually drop tens of thousands remodeling). But I expect this to be my forever home and want the space, so the upgrade is worth it to have a large basement for entertaining, 3 car garage, and lots of large bedrooms since we are multiple adults living in a home that like our space. It's frustrating to see that so many homes have tiny bedrooms and tiny to non-existent closets. So 4k square feet sounds ginormous, but all of the space is actually functional and usable. Not a McMansion with 7 rooms you'll never use.

But that's part of what seems so crazy about the apartment market here. Tiny apartment costs more than 50% of the monthly expenses on a 4,000 sq foot house. Ridiculous!

[tqf258]

$76,715
After making payment i noticed the balance was over 100 less then i expected it to be still not sure why, but I'll take it!

[Randomsaver]

Closing the 2016 Book with this last payment.

Merry Christmas / Happy Holidays to y'all!


Mortgage Principal : $111K

I'm no longer terrified.
I'm especially this is a major milestone for me as I reduced my debt by 50%!

Mortgage Principal : $104K

I'd be very thrilled when I hit my next milestone of $52K.

[Randomsaver]

Lots of great updates from you guys! Keep it down (the debt)!

[Gailete]

Wow, I WISH I could get a 1BR apartment for that kind of money. I pay $1900 a month plus utilities now

I'm not sure that there are ANY apartments in my county that run that much to rent! I don't know what you do, but their aren't too many jobs that support the ginormous houses either - some, but most folks are blue collar workers, etc. My hubby says our area is the armpit of the nation. But a nice place to live accept for the weather (too cold and snowy in the winter although this one hasn't been too bad).

I'm looking forward to seeing how changing the mortgage due date will help with lowering the interest. Probably not much, but I am working on making progress on the cc first.

[amarowsky]

kinda glad to see this post still getting a lot of traction.
House Loan: $75K
House Debt: $66.5K on 1/1/17

66k/75K 3/3/17 ~nothing additional towards principle this month

Welched on my first extra principle payment.... I had to front the AirBNB reservations for a Europe Trip were doing w/ 11 of our friends in July. So I had an extra $3000, that I still need to recover from my friends.... Had to pay off the charge on the credit card immediately and it pushed down my back account below the level I like to maintain.

On the plus side! My wife just got a full time offer at her work (contract/temp to full time). So we are considering completely consolidating our deposits into the same bank. This will greatly increase our monthly contributions to our household ( I was pretty much covering everything by myself before.... and with no renters anymore, I was kinda jogging in place savings wise). With her contributions from her salary, we will have a monthly surplus I believe (hopefully starting within this month).

So if things continue towards plan, I should be able to collect some debts from friends and have my wife's pay contributing. Maybe May (or even as early as April) will be our first significant strike towards knocking down the principle!

[Guppy Tender]

Another extra payment Made

Okay I do not post every payment made, so the number has changed a bit since last time I made one of these posts.

The new number is 17y30w. This is no where near where I am aiming to be by the end of this year. Where I plan to be at the end of this year is under 15 years left. The truth is I have no idea how much money I will have to throw at the mortgage to do this, but I plan to throw as much as possible.

Today's payment reduced the mortgage by 11 weeks. According to the numbers given by the bank this saved me approximately $978 dollars in interest. The amount I gave the bank was $1500, not bad at all, saved myself almost 2/3 of what I gave them.

My mom would kill me, okay not literally, if she knew that I was posting this personal of information on the internet. What does it matter if people know the good things that are happening in my life.

Really I am hoping I can encourage others by letting them know what difference can be made by a small amount of paying down a little extra on their Mortgage(long term loans).

[Jluke]

The new number is 17y30w. This is no where near where I am aiming to be by the end of this year. Where I plan to be at the end of this year is under 15 years left. The truth is I have no idea how much money I will have to throw at the mortgage to do this, but I plan to throw as much as possible.

Amortization Schedule can allow you to play with extra payments to see the impact on the payoff schedule. Very powerful tool.

[greenskeeper]

Amortization Schedule can allow you to play with extra payments to see the impact on the payoff schedule. Very powerful tool.

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

[greenskeeper]

Today's payment reduced the mortgage by 11 weeks. According to the numbers given by the bank this saved me approximately $978 dollars in interest. The amount I gave the bank was $1500, not bad at all, saved myself almost 2/3 of what I gave them.

30 year note costs about 3/4 of the principal in interest. If more people realized how much finance cost are in a mortgage I'm sure at least a few more would pay even a tiny bit extra each month.

[Gailete]

30 year note costs about 3/4 of the principal in interest. If more people realized how much finance cost are in a mortgage I'm sure at least a few more would pay even a tiny bit extra each month.

I would also bet that fewer of them would be so pleased to 'only' need 3-5% down if not, a no down payment financing. One good reason for the 20% down besides no PMI which is a huge chunk of change depending on the price of the house, but having that big down payment means a better chance of paying off the house and it would also be harder to be underwater with it if the house market does what it did in 2008. People with basically nothing down have no 'skin in the game' and I would think find it much easier to walk away if they can't make the payments.

Saving for a 20% down payment isn't meant as punishment of some sort, but a way to measure if a person/couple has the grit to save and do what is necessary to buy and deal with the finances of owning a house. The same theory of what you see happening to apartments that people live in where the government pays all but a minimal rent to the owner. I have driven past those places that had just been remodeled and you will all ready see screen doors that are broken or kicked in, broken windows, trash all over the front yard, etc. The people living there aren't paying much of anything so what do they care and they know they won't be assessed a damage fee if they do mess things up since they can't afford to pay for it.

[Randomsaver]

30 year note costs about 3/4 of the principal in interest. If more people realized how much finance cost are in a mortgage I'm sure at least a few more would pay even a tiny bit extra each month.

My initial interest was 5.5% and at 30 years it is a little higher than 100% of the principal. So yeah, if people don't refinance or pay extra, it is equal to paying the house 2x.

[greenskeeper]

My initial interest was 5.5% and at 30 years it is a little higher than 100% of the principal. So yeah, if people don't refinance or pay extra, it is equal to paying the house 2x.

The only "plus" side is, and this is a broad generalization, is that after the 30 years of payments the house has increased in value to where you pretty much break even or ahead.

[Gailete]

If more people realized how much finance cost are in a mortgage I'm sure at least a few more would pay even a tiny bit extra each month.

The same prinicple works for credit card bills as well. Even if you aren't going to have enough to make extra payments on the card, by dividing them and paying 1/4 or a 1/3 of the payment as soon as you have it and if the only 'extra' is rounding up each payment to the nearest dollar, you will be saving on interest, since once you pay part of it off, that part is no longer accuring interest -- and NEVER will again! I really saw how that worked on the car loan. The amount that was going towards interest was definitely less with each payment I made. So depending on the amount owed and the interest rate, paying some weekly or bi-weekly (however you are paid and have the money) will help. Especially if you take a second job to 'pay off the bills'. Each time you get paid for it, cash the check and send it into the bill you are working to pay off. Otherwise you might find out by the due date that you have frittered it all or most of it away.