Anonymous wrote:I love the idea of owning my place outright and having no mortgage. It doesn't really make financial sense to do that, but I love the idea. There's something appealing about reaching an accomplishment that most don't reach until their 60s. And there's something appealing about having no monthly payment.
We refi'd and are now paying extra principal to keep the monthly payment the same. No difference in cash flow for us, but we own the home sooner. Yes, that money is better maximized elsewhere, but it's a nice way to save more while not really changing any habits.
Anonymous wrote:I love the idea of owning my place outright and having no mortgage. It doesn't really make financial sense to do that, but I love the idea. There's something appealing about reaching an accomplishment that most don't reach until their 60s. And there's something appealing about having no monthly payment.
We refi'd and are now paying extra principal to keep the monthly payment the same. No difference in cash flow for us, but we own the home sooner. Yes, that money is better maximized elsewhere, but it's a nice way to save more while not really changing any habits.
Anonymous wrote:Anonymous wrote:We were paying $1k extra every month towards the principal until the pandemic. With the general uncertainty then, we decided to save it up in a bank account in case of job loss. Now I'm tempted to pay that extra into a brokerage account until we meet the mortgage payoff amount and then just pay off the whole thing whenever that is. Has anyone done this instead of prepaying mortgage every month?
I wouldn’t dump money in stock market right now as it is due for a correction but when it drops yes
Anonymous wrote:We were paying $1k extra every month towards the principal until the pandemic. With the general uncertainty then, we decided to save it up in a bank account in case of job loss. Now I'm tempted to pay that extra into a brokerage account until we meet the mortgage payoff amount and then just pay off the whole thing whenever that is. Has anyone done this instead of prepaying mortgage every month?
Anonymous wrote:Anonymous wrote:We pay an extra $500 each month to principal.
This is what we do (different amount) we are knocking off amost ten years off the 30 year loan as a result.
Anonymous wrote:We have an investment property that we plow all profits back into the principal. Starting loan amount 341k/30yr/2.875. Current extra payment is $500. Current savings in interest 64k, shaving off 10.5yrs. Ad we increase rent, we will increase principal payments.
Our goal is to.1032 exchange this into our retirement home and be able to keep all the tax free profits from our primary home and not have to dip into that money for housing.
The net is for renters to fund our future housing costs.
Anonymous wrote:Anonymous wrote:We have decided we would like to pay down our mortgage. I know people will debate for days about whether that is a good decision, but we would like to be debt-free so that's what we're doing. We have 27 years/$350k+ left on the mortgage, so this will be a slow process. Would love to hear from people who have done/are doing this to see how long it took you and/or when you started feeling like you were making a dent in it.
I have heard making the payments every two weeks instead of every month can make a significant impact. You need to discuss this with the mortgage company though. Any additional payment you make should be applied towards the Principal and this should be pinned down in writing by the mortgage company.
Anonymous wrote:Anonymous wrote:Anonymous wrote:No need to debate. It's not a good decision.
Usually it isn’t. But my friend in Feb 2000 sold 600k worth of internet stocks and paid off mortgage did well.
People always use examples that they earned more in the stock market than they would have paying off the mortgage. However, they never acknowledge that they could not have known in advance that investing would have been the better outcome. If over the next decade the stock market had a 0 percent real return, they would be posting about how smart the were to have paid down their mortgage. The mortgage is a guaranteed rate of return in the amount of the interest rate on the loan. Investing in stocks could lead to a higher return but there is risk. It's not to say one is better than the other. It is simply to acknowledge that no one knows what the optimal outcome might be in the future.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Paying a mortgage off early when the interest rate is good is such a middle class thing to do. Rich people don't have a mortgage -- they have two.
Yes, but people who are going to get rich, from a current non-rich condition, don't do it by having two mortgages. Thanks for playing.
Actually, leverage is EXACTLY how the non-wealthy become wealthy.
Speaking as someone who has done it: nope.
Okay then. How about this?
Actually, leverage is EXACTLY how the wealthy become wealthier.
Anonymous wrote:Good for you, OP. It's a great feeling when you start to make a dent. If you have enough to pay down the mortgage, you probably have enough to refinance to a slightly more expensive 15-year loan with a lower rate. Here is what we did:
-Bought in 2017 with 4% $385k 30-year loan ($2500/mo) - original maturity date was 2047
-Paid down about $25k between 2017 and 2019 (only about half of that was from monthly mortgage payments, the rest was add'l principal payments we made)
-Refinanced in 2019 to a 3% $360k 15-year loan ($3000/mo) with a maturity date of 2034
Since we refinanced in 2019 we have paid down about $70k and if we made no extra payments we would pay it off in 2032 (15 years after we took out the original 30 yr loan, 13 years after we took out the 15 year loan). I suspect we will continue to make extra payments at the same clip we've been going at and end up paying it off somewhere between 2025 and 2030. I'm a big fan of paying it down because I would probably just keep the money in savings otherwise, and because we've paid down so much, a significant amount ($1500) is going to our remaining principal every month.
Anonymous wrote:Anonymous wrote:No need to debate. It's not a good decision.
Usually it isn’t. But my friend in Feb 2000 sold 600k worth of internet stocks and paid off mortgage did well.