17 years and counting ;)

iVillage Member
Registered: 04-10-2003
17 years and counting ;)
8
Sat, 08-25-2012 - 10:06am

So when I redid my mortgage I dropped down to a 20 year amortization (was at 40 5 years ago) which was great. Then I moved my paymets to accelerated bi weekly which knocked off another 3 years. So with some investments that I have which will be paying dividends straight to my mortgage, I'm going down to 13 years.

I know its still a long time, but I've been feeling debt fatigued lately and am looking for *anything* to keep me going!


Bex -

iVillage Member
Registered: 12-31-2010
Tue, 08-28-2012 - 2:40am
Bex -
You are only in your 30s, right? You will have your home paid off by your mid forties, that is AWESOME!!
Now your goal should be to get $1M in savings so you can be considered an "acredited investor" or someone of higher net worth who can take advantage of some investments that those of less means cannot, due to risk and suitability. That will accelerate your returns through the roof.
-Marie
#Marie
iVillage Member
Registered: 10-01-2008
Mon, 08-27-2012 - 4:28pm

I agree, excellant planning.  You may or may not live in that house the rest of your life, but who knows.  At least by reducing the mortgage you will have more equity to put in your pocket if you do sell before the 13 yrs. is up. 

GOOD thinking!

Norma


"Patience is the best remedy for every trouble"- Plautus


Community Leader
Registered: 08-25-2006
Mon, 08-27-2012 - 2:50pm

Either way, I think it is always good to have a reminder about reading the small print and having a clear understanding of the terms of any kind of loan. 

For example, when I had to finance my transmission rebuild, they also offered 6 months same as cash.  The Aamco guy was very clear to clarify what "6 months" really was.  6 months is 6 months, not 6 monthly payment that in reality don't start for a few weeks after the service was provided and you signed the contract.  If you wait to pay off with the 6th payment, you are too late and would be charged interest. 

But thanks everyone for sharing.  Just a good reminder that unless I want a lower interest rate, I can always just throw more towards my mortgage principal. 

 

Serenity
iVillage Member
Registered: 03-15-2012
Sun, 08-26-2012 - 10:28am
thatyank wrote:
We were talking to a loan officer about refinancing yesterday and she saw we were on loan acceleration. SHE says it's a scam in that the extra $$$ you pay in through that program aren't credited toward your principal until the total adds up to one month's payment (in our case, more than 16 months later). Meanwhile, that accelerator company (which is not your mortgage holder) keeps your extra payments in an interest bearing account that THEY keep the interest on! In addition, they charge you a fee for "taking care of your money"!!

She said you are better off taking that payment coupon for your mortgage and writing the check for whatever extra and checking the "apply to principal" box... It gets applied immediately and no fees charged.

All this was news to me but...

Just saying'...

I think this depends on what country and what bank you are with.  In Canada, accelerated payments mean that your payment amount is based on 24 payments a year but in reality you are making 26 payments.  By the end of a one year cylce you will have made an extra month's payment on your mortgage done with little higher payments each payment.  The extra goes directly to your principle with each payment and DOES NOT go into a holding account until you accumulate one years payment.   I know this as I worked 7 years in a mortgage department in a major bank.

Sandra

iVillage Member
Registered: 04-10-2003
Sun, 08-26-2012 - 10:26am
Thanks for the info. Maybe its different in the US, but in Canada, everytime I make a payment it breaks down what the normal payment would put towardws the princicple but the extra. But that could be because my bank holds the mortgage? Either way, the mortgage is set up so that every additional payment made outside the required amount goes straight to the principle. But that was in the mortgage contract when I negotiated it.

Bex -

iVillage Member
Registered: 01-03-2001
Sat, 08-25-2012 - 10:21pm
We were talking to a loan officer about refinancing yesterday and she saw we were on loan acceleration. SHE says it's a scam in that the extra $$$ you pay in through that program aren't credited toward your principal until the total adds up to one month's payment (in our case, more than 16 months later). Meanwhile, that accelerator company (which is not your mortgage holder) keeps your extra payments in an interest bearing account that THEY keep the interest on! In addition, they charge you a fee for "taking care of your money"!!

She said you are better off taking that payment coupon for your mortgage and writing the check for whatever extra and checking the "apply to principal" box... It gets applied immediately and no fees charged.

All this was news to me but...

Just saying'...

Community Leader
Registered: 08-25-2006
Sat, 08-25-2012 - 1:32pm
That is wonderful!

I try not think about where I would be if I hadn't refinanced 5 years ago and the 30 years started over. But, I also remind myself that my xH could have forced my hand to sell or buy him out, so really it was going to happen one way or the other, regardless.

Besides, nothing says I can't hit the principal hard or refinance again in the future.

It is great you are in a position to do this now.
Serenity
iVillage Member
Registered: 10-28-2009
Sat, 08-25-2012 - 10:15am
excellent, that is great planning and making great use of your money! Great job!