Anonymous
02/07/2023 00:44
Subject: Trying to pay more on house over time to decrease interest
Anonymous wrote:Anonymous wrote:Pay a bit more. Mine I got a CD that matured in 2021 for 140k and since rates were so low for CDs dumped it towards mortgage. It knocked 10 years off my 30 year mortgage
Now it is paid off earlier when I am 75 instead of when I am 85.
Had you dumped that money back in a CD, you would probably be breaking even now and be on the road to using the leverage to make money.
OP has been in the house for 10 years. That means their rate should be ~3%. No way I would have paid that off early then and definitely not going to pay off early now.
+1. We have been in our home for 2 years with a 2.75% interest rate. No way will we prepay.
Anonymous
02/06/2023 11:31
Subject: Trying to pay more on house over time to decrease interest
Anonymous wrote:Pay a bit more. Mine I got a CD that matured in 2021 for 140k and since rates were so low for CDs dumped it towards mortgage. It knocked 10 years off my 30 year mortgage
Now it is paid off earlier when I am 75 instead of when I am 85.
Had you dumped that money back in a CD, you would probably be breaking even now and be on the road to using the leverage to make money.
OP has been in the house for 10 years. That means their rate should be ~3%. No way I would have paid that off early then and definitely not going to pay off early now.
Anonymous
02/06/2023 07:39
Subject: Trying to pay more on house over time to decrease interest
Pay a bit more. Mine I got a CD that matured in 2021 for 140k and since rates were so low for CDs dumped it towards mortgage. It knocked 10 years off my 30 year mortgage
Now it is paid off earlier when I am 75 instead of when I am 85.
Now it is paid off earlier when I am 75 instead of when I am 85.
Anonymous
02/06/2023 07:20
Subject: Trying to pay more on house over time to decrease interest
Anonymous wrote:Are you sure? The interest rate and term stay the same. But you have made an additional payment on the principal. So the outstanding balance is less, thus lower interest payments. That is whole purpose of recasting a loan, otherwise why would anyone do it??Anonymous wrote:Anonymous wrote:You pay into principal extra each month. Make sure it gets designated for principal. Then if your bank allows recast. We saved a lot of money that way. We did two recasts.
Recasting doesn’t change the total interest you pay. It is always calculated on the actual outstanding principal, it doesn’t remain static.
If you pay the old mortgage amount, total interest will stay the same. If you pay the new payment, you'll actually pay more interest over time. The purpose of a recast is flexibility and reduced monthly obligations.
https://www.kitces.com/blog/bad-mortgage-prepayment-psychology-and-the-need-for-automatic-recasting/