3.0 for 15 year mortgage

[kwillia]

Originally Posted by ProfMoneyWise

Points taken.

Given the choice between having debt or not I choose the former.

I have some control I suppose. I plan to pay my taxes and if they do choose to put a road through my property I have some faith in compensation.

As for the last point I'm an HOA type so I am not a good point of contention on that one.

I do understand your point and I agree that having your house paid off is the ideal, but I feel it is misleading for anyone to say we can own a house when we are on the hook for thousands and thousands in taxe each year even when we are in our retirement years and most likely living on a fixed income. As for HOAs... I purposely don't live in a neighborhood and I can't imagine not being able to park our commercial vehicles on our property or to not be allowed to have the 5 cars and trucks parked in our driveway that we currently have or to not be able to throw parties whenever we want or to not be able to display the American flag or to have antique tractors or to let my son do mechanical work on vehicles in the driveway or to not be able to etc. etc. etc. We like the freedom that comes from not being in a neighborhood and having a HOA.

[ProfMoneyWise]

Quick point. Dahlia HOA has no issue with the display of the flag.

[ginwoman]

Originally Posted by ProfMoneyWise

Don't pay a fee to do what you can do yourself.

Divide your payment by 12 and send in that amount as extra principal each month or just save up 1/12th each month and send that in once a year.

It equates to approximately 8 years of a reduction on a 30 year mortgage.

Look into a 15yr fixed and do a re-buy at a very low rate. You may find the cost to do so to you per month as far as a payment goes may be very doable and close to the same amount you are looking at with adding the 1/12th payment.

Good thinking either way. Owning where you eat and sleep is liberating.

OK when you say divide your payment by 12...do you mean just the principal or the total (which includes taxes & insurance)?

[GWguy]

Originally Posted by ginwoman

OK when you say divide your payment by 12...do you mean just the principal or the total (which includes taxes & insurance)?

I won't say it doesn't matter, but you are putting this extra money against the principal only. So if you calculate with principal you put 'x' dollars towards the principal. If you calculate with both principal AND insurance, you put 'y' towards the principal, and 'y' will always be much higher than 'x', and therefore reducing your principal even faster.

Example: Your mortgage is $1500/mo, 800 of which is principal, and 700 is insurance, you could put an extra $800 towards the principal in a year, or $67 more a month, or $1500 towards the principal in a year, or $125/mo. Obviously, $125 is better than $67.

Those are guidelines. ANYTHING you can put against the principal will help reduce the number of years you pay. The more you can afford to put into the principal, the faster you can get out from under the mortgage.

[blazinlow89]

Originally Posted by ginwoman

OK when you say divide your payment by 12...do you mean just the principal or the total (which includes taxes & insurance)?

I am going to do the total without escrow. Which is $1062, or $88.5 a month. Also since I am switching to bi-weekly payments I will essentially make 2 extra payments a year. Calculator said payoff time will be about 18-20 years vs 30. Saving over $100k in interest.

Talked about this at work the other day and someone said it was dumb to cut so much interest due to the tax deduction. Seeing as I paid $4500 in interest since July 1, and my tax return will only see about $1000 of that. Getting and extra $2000 back each year sounds nice, but not paying $100k over the course of the loan sounds even better.

[ProfMoneyWise]

Your co-worker has fallen for the tax deduction myth.

Think about it. You sent the bank $4,500 in interest to avoid sending the IRS $1,000. You could have just sent the IRS their $1,000 and kept $3,500 at home.

You are doing the right thing, keep going.

[Rommey]

Originally Posted by ProfMoneyWise

Your co-worker has fallen for the tax deduction myth.

Think about it. You sent the bank $4,500 in interest to avoid sending the IRS $1,000. You could have just sent the IRS their $1,000 and kept $3,500 at home.

You are doing the right thing, keep going.

I have never understood why people think its a good thing to be able to take that deduction. As I said in post 25, not having a mortgage allowed me to concentrate on all the other debt I had and gave us the flexibility to maximize my wife's 403b contribution.

If I had stayed on the original mortgage and made only the minimum payment, I would still have nine more years to pay. Getting rid of that huge monthly cost allowed me to concentrate on the other (as a group) huge monthly debts (i.e., credit card and car loans), and I am within a month of being 100% debt free.

Yeah, it sucks not being able to take that mortgage deduction.

[ginwoman]

I

Originally Posted by GWguy

I won't say it doesn't matter, but you are putting this extra money against the principal only. So if you calculate with principal you put 'x' dollars towards the principal. If you calculate with both principal AND insurance, you put 'y' towards the principal, and 'y' will always be much higher than 'x', and therefore reducing your principal even faster.

Example: Your mortgage is $1500/mo, 800 of which is principal, and 700 is insurance, you could put an extra $800 towards the principal in a year, or $67 more a month, or $1500 towards the principal in a year, or $125/mo. Obviously, $125 is better than $67.

Those are guidelines. ANYTHING you can put against the principal will help reduce the number of years you pay. The more you can afford to put into the principal, the faster you can get out from under the mortgage.

This is my line of thinking too. Always has been. But my financial adviser says don't concern yourself with paying off the mtg earlier because in my case paying the extra would put a hardship on our family. We wouldn't have any breathing room. And it makes sense because why totally strap myself down now while I'm 50, just so I can have a "paid for" house when I'm 70 and then get sick and or drop dead?

[h3mech]

we got a 10 year mortgage from state farm for 2.75%

[GardeningGal]

We used Quicken and got a great rate and they were really on top of things. Craig Wood was our Loan Officer. I can send you his number and email if you like.