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Paying Off Your Home Mortgage


Bronze Post Medal for All Time! 146 Posts
August 3, 2011

Handing Over Keys To HousePaying one additional mortgage payment each year, whether in a lump sum or monthly increments, can lower a 30-year loan down to 18 years. If you pay more than one extra payment, the number of years will decrease even more.

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Since this additional payment will be applied only to the principal and not the interest, you end up saving thousands and thousands of dollars once the home is paid off! And it also lowers the total amount of interest the borrower will pay, because it lowers the principal and length of time it will take to pay off the loan. So you save twice with each overpayment. Make sure you have pre-payment privileges in order to save.

By Julia from Boca Raton, FL

 
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Silver Post Medal for All Time! 255 Posts
January 12, 2014

You can pay your mortgage payments bi-weekly, rather than monthly. Two more payments a year adds up a lot of savings over several years. I shaved several years off my mortgage by doing this.

 


Silver Post Medal for All Time! 277 Posts
August 31, 2007

Reduce the amount of interest you pay on your mortgage payments by simply adding additional principle dollars to the payments you make each month. You don't have to do this every month; you could do it once or twice a year if you receive bonuses or a tax refund.

 
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July 5, 2004

To really cut years off your mortgage, make an extra payment a year but do it this way. Say your mortgage payment is 1200/month.

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Divide that by 12 ($100) and add that above and beyond that monthly payment.

 
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August 12, 2011

If you are in good standing on your Mortgage payments, many banks will put you on Bi-Saver payments which means that you pay one half of your monthly mortgage payment every two weeks.

 
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June 24, 2004

If your mortgage payment is $1200 per month and you normally pay it on the 1st of the month, start paying $600 on the 1st of the month and then on the 15th of the month pay the additional $600.

 
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January 9, 2012

I am 48 years old and have 3 boys (16, 13, 7) and a wonderful husband. I have so badly wanted to "get it" when it comes to living frugally, but I get caught up in suburban life and credit line mortgages. Expenses such as music lessons, soccer teams, vacations, clothes, healthy organic foods, restaurants etc. have kept me from our goal of paying off our mortgage, car loan, etc.

I would love to hear about any stories where families have started living frugally "late in the game" and have achieved success. I want the best for my boys regarding school and opportunities as I am sure every parent feels. Thank you to everyone for your support and thank you to this site for providing inspiration.

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By jjawt from BC

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January 12, 20120 found this helpful

Hello jjawt, although I am in the UK I think living styles are reasonably similar for me to assist. I live a suburban life but thankfully, I don't keep up with the Jones'. This means I don't aspire to be like others who are happy to spend money on credit and worry about how to pay debts off.

There are many sites and forums for advice, start doing your research. You could start by looking at the need of 2 cars, can you get by with 1? Do your children need to do all the activities? Can you start looking at your eating schedules and change to meal planning and bulking out meals and eating more veg and less meat and cooking from scratch? I use cheap electricity at night to set my washing machine and dishwasher going, is this possible for you?

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It takes planning and some time to achieve a cheaper lifestyle but because of the financial situation in the UK and the impact on food prices, fuel etc., I have now given up eating out to twice a month and the cinema nights out are on the back burner for this year anyway. If you look at your life as a whole you will be upset and give up on this new challenge but look at one area first, solve this and move on to the next think - baby steps.

If you would like more information message me. Good luck with your new adventure, I hope to pay off my mortgage early and I have found new fun outings which don't cost a lot or are free. Can this also help you?

 

Bronze Post Medal for All Time! 104 Posts
January 12, 20120 found this helpful

It's never too late. I pretty much lived that lifestyle when I was married. I never was an over spender but I certainly wasn't frugal either. When I got divorced at the age of 48 and custody of two teenagers, I didn't have much of a choice. I found it so rewarding when I found a bargain at the thrift store or when I got something free my using double coupons. It's really fun being frugal because you feel so in control of your life.

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In my case, becoming frugal has brought so much self esteem and I don't care what other people think. I have a good friend that has always seemed envious of me because I don't have debt. And now that we are seniors, it seems beneath her to ask an establishment for a senior discount. I have a sister that has always told me I'm lucky because of no debt but she does not get it that having a secure lifestyle required sacrifices.

I know you want the best for your kids but doing without one thing or activity for the good of the future is well worth it. It's a good feeling knowing a house is paid off and there is a raining day savings. Sleep comes easy.

 
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January 15, 2008

Set your sights high. Know what you want, and then use every ounce of your being to get what you want. A number of years ago, my hubby and I decided to buy a house. We found the perfect house for us.

 
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January 8, 2009

I want to know if there is a way to pay off your mortgage faster. I live in Canada.

Little Princess

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Silver Feedback Medal for All Time! 290 Feedbacks
January 8, 20090 found this helpful

I don't live in Canada, but in the U.S.A. I suggest that you contact your bank who holds your mortgage and ask if there is some way that you can pay off your mortgage sooner.

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They might be able to juggle your payments so you are paying more money on the principle.

 
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February 4, 2006

I am sending weekly mortgage payments to my lender and sent a request in writing instructing them how much to apply to principal, interest and escrow. They accept my payment but hold it in a suspense account until I call when the next payment is due and tell them to apply it. Every time I call they tell me they do not accept partial payments, yet they hold my money without applying it.

I do this to make it easier to budget weekly, and was hoping to apply money to the principal to get the amount down weekly. Is it legal for them to hold my money in a suspense account even thought I have instructed them how to apply it? Can they refuse these payments legally? My mortgage payment is always on time and up to date. Can you help?

Cindy

Answers

By (Guest Post)
February 5, 20060 found this helpful

Most mortgage companies will not accept weekly or bi-monthly payments unless you sign up and pay them for the privilege. You are lucky they hold the partial payments in a suspense account. Many put the partial payment in the escrow. If you check the fine print in your mortgage paperwork, the monthly payment is covered.

If you wish to pay down the principle faster, add $10 or more to your monthly payment, designating it as extra principle. The will work much better than weekly payments and the mortgage company will accept it without problems.

 
February 5, 20060 found this helpful

Oh my goodness... You know, i had thought about doing this before i went to online banking. I had never thought about them not taking the extra payments.
I would check with your state and see if there is any such law, and then go to the head of whatever company you are dealing with.
If you could do what you are doing, it will help you in getting it paid for so much faster, and not having to pay as much interest... but it looks like this company doesnt want you to.
Check into online banking where you can make your payments online, anytime, and however much you want.
Wish i could be of more help...

 
February 5, 20061 found this helpful

Thanks for the replies. Unfortunately, I guess I did not make myself clear. The mortgage company does not have a "sign up and pay" privilege. As for adding $10 to the monthly payment, I could certainly do that. The point is that it is MUCH easier budgeting out 1/4 of the monthly payment per week than trying not to spend that amount each week, holding onto it to pay the entire amount on the 1st. As for online banking suggestion that is exactly how I am paying right now! The problem is the mortgage company putting the payments in the suspense account instead of appling them to the next months payment. I have spoken to the banking regulation board in my state and was told that no institution can refuse a payment. The mortgage co is not in my state, unfortunately. I have also spoken to numerous supervisors and managers in that company, only to be told the same thing, that they do not accept partial payments. My real question is, Is it legal for them not to apply the payments the way I request to be applied, and is it legal for them not to accept the payments at all.

 
By Dean (Guest Post)
February 7, 20060 found this helpful

Most banks and mortage companies will except bi monthly payments when it is applied to the principle.In your post you say you want the mortage company to apply your payment to taxes and interest as well.That may be your problem.When appling extra money to the mortage it should be applied to the principle only.Trying to pay extra money on taxes and interest is costing you money.Also it should be applied just once a month not every week.For example you send in your regular payment on the 1st of the month then a second payment 2 weeks later.I would call back your mortage company and tell or ask them how they want you to make just principle only payments once a month.
Regards,
Dean

 
By Jennifer (Guest Post)
February 7, 20060 found this helpful

We have the same budgeting stratagy, but instead of sending off each check we write weekly, we have a "holding" drawer (or it could be an envelope) where we keep the written checks, and then send them all at one time each month. This will save you postage too.

 
February 7, 20060 found this helpful

You could see if they'd let you re-do your mortgage with payments on a weekly basis. My guess would be not, because intrest is generally calculated on a monthly basis. Your mortgage is a contract, and if you want to change it, you might have to go through the process of getting a new mortgage.

 
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Bronze Feedback Medal for All Time! 153 Feedbacks
January 5, 2009

I have been re-reading Possum Living by Dolly Freed. Her number one thrift tip is to have your house paid for.

 
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