So little did I know...

Disclaimer: Links on this page pointing to Amazon, eBay and other sites may include affiliate code. If you click them and make a purchase, we may earn a small commission.

CHOO CHOO

BackPagePhil
Joined
Feb 21, 2011
Posts
12,787
Reaction score
5,032
Location
Manheim, Pa
Just seen this and have thought about this as well, but for my mortgage. I was reading an article about it and they said it's better to invest that money elsewhere since the interest you will save will be minimal compared to the potential profit you can make.

I've always been told that if you make one extra mortgage payment a year, it will take 6-8 years off your mortgage and save you a bunch on interest. But after reading that article, it basically says, if you have a $1000 payment, and make an additional payment each month, the money you are putting towards the principal will only save you $xx.xx dollars. But if you take that extra money and invest it elsewhere, it can make you more than the $xx.xx dollars you saved on Interest. Does that make sense?

I'm so torn.....
 
OP
OP
Doubeleive

Doubeleive

Wes
Supporting Member
Joined
Nov 7, 2017
Posts
23,415
Reaction score
34,038
Location
Stockton, Ca.
Just seen this and have thought about this as well, but for my mortgage. I was reading an article about it and they said it's better to invest that money elsewhere since the interest you will save will be minimal compared to the potential profit you can make.

I've always been told that if you make one extra mortgage payment a year, it will take 6-8 years off your mortgage and save you a bunch on interest. But after reading that article, it basically says, if you have a $1000 payment, and make an additional payment each month, the money you are putting towards the principal will only save you $xx.xx dollars. But if you take that extra money and invest it elsewhere, it can make you more than the $xx.xx dollars you saved on Interest. Does that make sense?

I'm so torn.....
I would say probably not not unless your interest rate is super low, me paying double payments has reduced my loan from 5yrs to 2yrs or less, I was watching a video a guy did (on homeloans) where you make a $10k payment on the principal every year and it made a 30 year loan a 10-12 year loan, it sounded a little tricky because he was talking about using a line of credit to do it if you had a fixed income but I don't know it kind of made sense. if I had only been making the minimum payment I would be paying almost $7k more in interest. so I think I am way far ahead of the game, I could have saved myself more if I had really tried to pay more principal at the very beginning of the loan, but now I know.
 

randeez

Full Access Member
Joined
Sep 29, 2017
Posts
6,029
Reaction score
18,437
Location
south florida
yep.... at the heart of it, whatever your investing in needs to return higher than your interest rate. getting up into 7-8-9% probably isnt worth it.


trying to get yukon paid off, loan rate on it isnt all that great. I am a few payments ahead and try to make a payment every paycheck (twice a month) one to principle and one to regular payment.
 

CHOO CHOO

BackPagePhil
Joined
Feb 21, 2011
Posts
12,787
Reaction score
5,032
Location
Manheim, Pa
exactly, I ran it paying an extra $700 a month and it cuts the loan time in half and saves 170,000 in interest, and that's at a rather high 6%

View attachment 208138
Good lord, what the hell do you do for a living and can I get a job with you....extra $500 a month on the vehicle and an extra $700 on the mortgage. Sheesh buddy, how many knee pads do I need to buy to get that kinda money.....hahaha
 
OP
OP
Doubeleive

Doubeleive

Wes
Supporting Member
Joined
Nov 7, 2017
Posts
23,415
Reaction score
34,038
Location
Stockton, Ca.
Good lord, what the hell do you do for a living and can I get a job with you....extra $500 a month on the vehicle and an extra $700 on the mortgage. Sheesh buddy, how many knee pads do I need to buy to get that kinda money.....hahaha
NO, LOL I was just putting in a imaginary number to show how much a person could save I lost my house a few years back unfortunately looking to probably buy again in a couple more years, I had bought a house with a "devil women" 1/2 & 1/2, then our relationship didn't work out and she didn't make diddly squat for money I moved out and she was supposed to move out so we could rent it and keep it just business, but she couldn't even afford to move out so I was paying the mortgage and rent on another house and after about 2 1/2 years the money just ran out, lost 100k on that freaking house, next time its going in my name only IDGAF if she's an angel from heaven once you buy together your stuck and just hope it works out, lesson from the now wiser.
 

CHOO CHOO

BackPagePhil
Joined
Feb 21, 2011
Posts
12,787
Reaction score
5,032
Location
Manheim, Pa
Well shit. Guess it's good this house is in my name only....hahaha and sorry you got screwed dude, always seems the case in separation agreements....

According to this chart, if I make a $250 extra payment, it should pay my house off 10 years early. That's about on par with what I want. Kinda want to be mortgage payment free by the time I'm 50. So it gives me 15 years. If I can make it happen in 10 I'd be ecstatic. My interest rate is 3.85% on the house so it's hard for me to complain too much. 44f18d89170ad17b3f522978dfdb6eaa.jpg
 

Forum statistics

Threads
128,791
Posts
1,805,531
Members
91,775
Latest member
labans
Top