House Mortgage -- Countdown

[snafu]

Randomsaver, Amazing ! I believe as we will soon approach April, your home purchase date anniversary, I wonder if you're willing to examine how your razor focus may have impacted your home's value and debt.

As I understand it, you decided to focus on mortgage debt of $ 207,000. mid April 2014. In just 3 years, extra sums applied directly to principal has reduced the debt to about $ 104,000. That's phenomenal ! $103,000 reduction in debt in spite of monthly interest payments that began at $ 450. each month...now about $ 252. required each month.

It seems you have regularly reduced principal by $ 1K monthly. How many payments remain if you continue this astounding pace? How much does Zwillow in your region currently estimate's your house's value? How many months have you eliminated from your initial payment schedule? Have you any guesstimate on how much you've saved thus far in interest payments?

How do you feel this program has impacted your Net Worth?

[Gailete]

Our problem is self-employment. No paychecks other than my SSD one. The mortgage is paid out of that and most of the absolutes like health insurance, etc. We wait for hubby to bring home a big check from his work to have it go to those big tax bills, fire insurance and propane pre-buys for winter.

[JoeP]

And that is the killer. We don't have a conventional mortgage due to a variety of circumstances, so we have something more along the lines of a HELOC (I think). So the bank doesn't take out any money towards taxes or insurance. I have to come up with it yearly at the right time. On a very limited income anyhow it is hard work saving up that money, especially as one of the property taxes comes due two weeks after the April IRS bloodbath.

Our strategy will be something along the lines of having pay direct deposited into a special account to be used to pay those bills.

[Gailete]

We're at 18k now

Our monthly payment is $1607
Principal $983
Interest $69
Escrow $554 (taxes)

Insurance is on the side. After payoff, we will need to budget about 610 per month to cover taxes and insurance.

And that is the killer. We don't have a conventional mortgage due to a variety of circumstances, so we have something more along the lines of a HELOC (I think). So the bank doesn't take out any money towards taxes or insurance. I have to come up with it yearly at the right time. On a very limited income anyhow it is hard work saving up that money, especially as one of the property taxes comes due two weeks after the April IRS bloodbath. This year however, thanks in part to hubby not being able to work most of the year due to vision loss, our income was in the toilet and pretty much all of our estimated taxes are coming back to us and I think I managed to set aside most of Aprils property tax as well so that is nice to have that this year. Instead of looking towards April with fear and trepidation, I have already finished the taxes, and working on other money MAKING projects.

[JoeP]

We're at 18k now

Our monthly payment is $1607
Principal $983
Interest $69
Escrow $554 (taxes)

Insurance is on the side. After payoff, we will need to budget about 610 per month to cover taxes and insurance.

[Randomsaver]

I was given a 5 year fixed rate mortgage, calculated over a 25 year payback. This means I need to sign new mortgage papers in a little over a year from now.

My question is how much down payment does the bank expect at this point? I am assuming it is 10 percent. Is this 10% of the value of the the house value I bought the house for? Or is it 10% of what the balance of what I owe on the mortgage when I sign the new papers?

Sorry, if this is a silly question that everyone should automatically know the answer too. This is the first time I have taken out a mortgage. I need to know how much to be setting aside, to be properly prepared.

This question has been bugging me for the last couple months, so I thought it was time that I asked some people that might know.

I only had saved 5% of set aside money for DP at the time and they accepted it. Of course I did pay PMI up to when the Principal was paid down to 20%.

[Randomsaver]

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.

My monthly interest expense went down from $252 on 1/1/2017 to $228 for 4/1/2017. That is $24 payment swing to the side of principal reduction.

[Gailete]

I doubt either of those dates are going to happen as we most likely will move in with in-laws before then in order to take care of them.
Like

Well that is good of you. We just got a letter in the past week from our doctor who is leaving the practice to go be with elderly parents as well. Now for a doctor hunt

[Gailete]

I was given a 5 year fixed rate mortgage, calculated over a 25 year payback. This means I need to sign new mortgage papers in a little over a year from now.

My question is how much down payment does the bank expect at this point? I am assuming it is 10 percent. Is this 10% of the value of the the house value I bought the house for? Or is it 10% of what the balance of what I owe on the mortgage when I sign the new papers?

Sorry, if this is a silly question that everyone should automatically know the answer too. This is the first time I have taken out a mortgage. I need to know how much to be setting aside, to be properly prepared.

This question has been bugging me for the last couple months, so I thought it was time that I asked some people that might know.

The best way to get confirmed answers to those questions is ask the bank holding your mortgage. It sounds like you have an ARM with the first 5 years at a fixed rate. In general you shouldn't need anymore downpayment or need to sign any paperwork. But check with your bank and see the rate that they will hit you with and you might want to go shopping for a new mortgage with an all round better rate. I have never taken out an ARM as I was always scared off by the horror stories of people's mortgage payments almost doubling as the interest rate had gone up so much. I'm old enough to remember when ARMs were something new and not quite understood-LOL!

If the rate you are paying now is lower than anything you will be able to get next year, you might want to dump as much on the mortgage principle now so that the new payment will be based on a smaller principle amount. I think that is how it should work, but I know someone will correct me If I'm wrong. Too many people jump onto the ARMs because they can't afford the fixed rate, but when the new rates come into play, they find that they really can't afford the new payments, so anything to keep those payments low is a plus.

[MooseBucks]

Mortgage Principal - 176,303

Mortgage Principal - 175,053
Payments Left - 185 (Goal of getting that reduced to 168 and Stretch Goal of 116 months)

I doubt either of those dates are going to happen as we most likely will move in with in-laws before then in order to take care of them.

[Guppy Tender]

Planning Ahead

I was given a 5 year fixed rate mortgage, calculated over a 25 year payback. This means I need to sign new mortgage papers in a little over a year from now.

My question is how much down payment does the bank expect at this point? I am assuming it is 10 percent. Is this 10% of the value of the the house value I bought the house for? Or is it 10% of what the balance of what I owe on the mortgage when I sign the new papers?

Sorry, if this is a silly question that everyone should automatically know the answer too. This is the first time I have taken out a mortgage. I need to know how much to be setting aside, to be properly prepared.

This question has been bugging me for the last couple months, so I thought it was time that I asked some people that might know.

[Randomsaver]

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.

Mortgage Principal : $103K

[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.

[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.

[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.