A little extra to the mortgage principle

iVillage Member
Registered: 03-31-2003
A little extra to the mortgage principle
6
Wed, 06-08-2005 - 10:45am

DH asked me to pay our mortgage online, so I added $26 to the principal, rounding up to a total of $3k. I text-messaged him asking his thoughts on that, and before he replied I did it, then he replied and asked me to hold off a month. Oops! $26 isn't going to break us. I wish I knew how much that would save us in interest over the long-run!

Lee Ann

Lee Ann

www.werenotafraid.com

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Wed, 06-08-2005 - 12:17pm

Lee Ann - you can *totally* figure out the interest savings over time.

All my best,
Danni

iVillage Member
Registered: 03-31-2003
Wed, 06-08-2005 - 1:19pm

Hi Danni,

I think I did something wrong. The table said that by paying $26 extra toward principle every month, my mortgage would be paid off in 2012 instead of 2035, and that can't be right.

Would you be able to try it for me to double-check? We started paying the mortgage on May 1, 2005, and our interest rate is 7.75%. We'll be refinancing as soon as the house up north is sold, within the next few weeks, but for this exercise we can use the existing numbers.

Thanks!

Lee Ann

Lee Ann

www.werenotafraid.com

iVillage Member
Registered: 03-31-2003
Wed, 06-08-2005 - 1:50pm

I figured out what I did wrong - I had my monthly mortgage payment amount in the total mortgage amount owed cell .

So, paying $26 extra per month will shorten my mortgage by one year.

And, if my math is correct, that means we'll pay a total of $9,048 extra over the 29 years, but will pay $26,083 less in interest, for a net savings of $17,035. Ah-hem, that's what my new car cost! It's like getting a car for free! (you see now how I get in trouble with money, ha ha!).

Lee Ann

Lee Ann

www.werenotafraid.com

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 06-09-2005 - 12:14am

Lee Ann - I really hate to be a party pooper, but I think you can only count that car if you keep in for the next 29 years :-)


We try to stress frugality here, but I don't think any us are expecting you to keep your car *that* long!

All my best,
Danni

iVillage Member
Registered: 03-31-2003
Thu, 06-09-2005 - 8:39am
ha ha ha!

Lee Ann

www.werenotafraid.com

iVillage Member
Registered: 05-30-2003
Thu, 06-09-2005 - 11:35am

Lee Ann- Just remember to count it in Friday's snowflake totals! LOL-every little bit helps!

I know that I round up on some payments too. I figure it's more a mental victory for me, rather than a monetary one. Either way, it's all good.

Nice thinking about the car, there. It's all in how you spin it, that's for sure! :D

Lisa