It’s been so long since I did this… - Posted by Soapymac
Posted by Soapymac on October 28, 1998 at 09:08:55:
I don’t want you to totally rely on my numbers. However, the principles are quite sound.
If you changed your budget so that instead of paying your mortgage once a month you paid it you paid half your mortgage every two weeks…you would in essence be paying thirteen mortgage payments a year.
One payment would go directly towards principal. That alone would reduce your 30 year loan to about 23 years.
Get a good financial calculator AND LEARN TO USE IT AS A TOOL. Some on this board will suggest HP calculators, others will suggest TI calcs. Just get one and make it your friend. But I digress.
Another way to really save some money is to get a printout of your payments. The printout should show how much of each payment goes to principal and how much goes to interest. Take the beginning payments. Be sure you make one payment each month. Then, if you want to pay your loan down, take the subsequent payments (the next 2 or 3, for example), add the principal together AND CUT A SEPARATE CHECK to the bank to pay the principal on those payments.
This REQUIRES good record keeping. Make sure how these payments are applied. A banker told me there are FIVE ways that additional monies paid on a loan can be applied. Four of them work to the banks advantage. The fifth one I just told you about.
Lastly, make two mortgage payments a month. Believe it or not, this will cut a 30 year mortgage down to a little over 6 years. A financial calculator will prove that one for you.
Hope this has given you some ideas about paying off your own home. I did not address whether you should do this or whether you should take that money and invest it creatively. I’ll let others step in here for that.