Is anyone paying down their mortgage (extra principal)?

[FrugalGirl321]

We're prepaying heavily. We're in a 10 year loan with 9 years left. Our scheduled payment is $1050 but we pay $2200 every month. We have 21-24 months left.

We aren't comfortable leveraging our home mortgage balance for potential higher gains in investments. Prepaying is not for everyone. (We are fully funding 2 Roth IRA's and my husband's 401K).

[zakity]

We just did a new mortgage back in January. We got a much lower interest rate. It cut the payment in half. But, I am still paying the old payment. I will have the house paid off in 4.5 years if all goes well.

[readytorock]

Our monthly payment is $925 including property taxes. We prepay as much as we can each month, Some months that's $3,000 extra if my business does well, other months it's only $200 or $300 if sales are slower. My personal goal is to have the 30 year mortgage gone in 5 years total. So far, we're on track.

[Michael01]

One of the most significant benefits of prepaying your mortgage is interest payment savings. You will end up saving a good amount of money on interest payments.

[thomsoad]

I have a 10 year ARM of which 5 years still remains. I live here in Phoenix so needless to say I am incredibly upside down. So I thought long and hard about what to do in my situation.

Here is my thinking and what I did and am doing ...

I paid down my house just enough to get rid of my PMI... found that to be a VERY unnecessary $137 monthly payment.

My ARM rate now is 5.75% and I cant even begin to even think of refinancing til I pay down at least 75K. Now people are gonna tell me that the market will rebound in that time but if you lived here you would NOT be so optimistic!

So personally ... ive decided to put my xtra 1K into the stock market. I figure in the 5-7 years the market SHOULD on average provide me xtra income where if I want I can either pay off the house in full; or at least bring it down to refinance it.

The other reason I decided on this route is that in the event of a layoff in my 5 year span, I have xtra money for a rainy day as opposed to house thats not quite as upside down as it otherwise would have been... Personally, I dont see how that scenario wulda helped me.

So I say invest in the market. I actually found it the safer investment until you have enough to pay the house off.

[EconoMutt]

We try to put an extra $1000 a month toward principal.
Sometimes a little more or less due to our bills and variations in paychecks.

[Gina23]

Yes... the company that houses my mortgage has many options for downpaying your principle. Some of these charge a fee per month if you choose a certain option. Instead of being charged a fee, I simply just took what I wanted to spend / 12 and tacked that on as additional principle per month so I don't get charged that pesky program fee. The main reason I am trying to pay down my principle is to get rid of PMI. I hate paying money for no reason... and PMI is worthless for some of us... I realize why PMI exists and that I am not exempt simply because my morals are to make my home payment no matter what, but regardless it's under my skin. I'm one of those crazies who is waiting for the day where my principle payment amount is higher than my interest payment amount... I'll seriously throw a party

[PauletteGoddard]

Who is paying down their mortgage?
I am not. I used to pay down my mortgage, and being ten months ahead of my 20-year mortgage helped me qualify for a 12-year fixed mortgage refinance at 3.75% earlier this year. The twenty-year loan was at 5%. I'm happy with a 25% discount in interest without extending the term, and $13900 in savings from interest reduction and absence of closing costs and application fees, so I am not paying this new one down.

If I were not blessed with a historically low rate or enough equity to refinance, I would have continued prepaying.

What is your principal balance?
$118,000.

What are you on average paying per month toward the principal?
Based on September 2011 - August 2012, average is $680.

[greenskeeper]

The extra I've paid down the principal allowed us to refi down to 4.375% from 5.875% even with house values in a slump. If we had paid the minimum I doubt we would have enough equity for the refi as we have only been in the house for 4 years, but should be paid in full in another 8 max.

[NJDebbie]

In January of 2011 we made our first refi payment on a 15 year/3.75%. We've paid enough extra on the principal to reduce the life of the mortgage by one whole year already. Our goal is to pay the mortgage off completely by January of 2018 or sooner. Prepaying may not be for everyone but for us, it means peace of mind and the possibility to work less, travel or simply freedom to do whatever it is we want.

[Gina23]

The extra I've paid down the principal allowed us to refi down to 4.375% from 5.875% even with house values in a slump. If we had paid the minimum I doubt we would have enough equity for the refi as we have only been in the house for 4 years, but should be paid in full in another 8 max.

Yet another great reason to pay down the principle... in a down market such as the one we are in, it puts you in such a better position to take advantage of lower interest rates if you are not upside-down.

To answer to original question, which I realize I did not do in my first reply.

I put $250 extra toward the principle per month

My principle balance is $240,000. Home is valued at $290k. I have owned for 2 years and my rate is 4.25%. Death to PMI!!!!!!!!!!

[PatientSaver]

I've been prepeaying my mortgage since day 1. I'm now in year 16 with a $10000 balance on a 6%, 30-year loan. My prepayments over the years have varied according to my income; when i was laid off, i stopped completely but when i worked, i put a much has $400 extra each month.

I recently called the bank to learn that i've paid about $67,000 in interest but would have paid nearly twice that if i hadn't prepaid.