With your first example, my goal now is to check my amortization schedule and aggressively pay down the balance to where my normal payment pays more to principal than interest. Then I'll switch over to retirement investing.
William - sounds good! Paying extra in the beginning of the amortization goes a long way! Just be sure to make that payment of extra - separate- from your normal payment. And tell lender its to PRINCIPAL. Be sure on your next statement they don’t accidentally apply to escrow or something. FYI
Thanks for the honest straight forward information, and not trying to sell snake oil like some of the other youtubers who are clearly just out to take some of the pie.
Thanks for taking the time to comment. Appreciate you! My goal is to educate everyone! I have done this a LONG time (28 years) and my passion is getting good , accurate info to people ! 😀
What if you just want to get 3 months ahead so if you loose your job. You won't have to pay for 3 months. Like if there was another lock down and your not an essential worker. How would you go about doing that?
Before you do this you MUST call them. Lenders usually think that advance payments are you paying extra. YOu are responsible to pay each month, on the 1st (to the 15th). If I were you, just keep the money put aside on your own in savings, same result. That way it lessens the chance of error and mis application
Hi Enoch! I know paying 1 xtra per year takes off about 7-8 years, so two should be double that. I have a free digest you can put your address into, and lets you play around with mortgage payments/payoff etc! hmbt.co/2zpP06L
I have a dumb question. To clarify the example of making one extra principal only payment a year, you're saying that the one extra payment reduces the loan from 30 years to 21 years? So wgat happens when you make an extra payment a second year in a row? Does that cut the loan down a number of years too?
Hello, Question... sorry im new at this and a soon to be first time home buyer. is it best to pay two separate payment (one of mortgage of course) and pay the extra payment for principle? or can you add the extra amount with the total mortgage and let the bank/lender know the extra is for principle?
Hi Mr. Wright!!! this is an excellent question! Depends how you are paying. If you are doing a check , physical in the mail, 2 separate checks for sure. Less chance of input error. be sure in the memo you put ' PRINCIPAL'. If you pay on line, it lets you click' extra payment' and identify where it goes. I hope this helps!