I bought my home a few years ago, and ever since I’ve started making payments, I always pay a little extra extra towards the principal. Sometimes it’s $10, $800, $60, it’s always something. I swear this was/is the best decision I’ve ever made financially. My goal is to have my mortgage paid off early, and I think it’s going to happen.
When mortgage rates were low, I refinanced. I was nervous as hell to do so but I did. I did some research on why I should, spoke with two friends who are financially savvy, I think I also posted here. Either way I got some good advice, and understood why it would be beneficial to me yo do so.
I ended up getting my rate down to 2.75% and reduced by $200 a month. The money saved from the refinance, I used to help throw at my student loans.
I’d shared with my sister to refinance her mortgage and shared why it would have been beneficial, she refused. Once before she’d done this and locked into a balloon mortgage and lost her home (2008). I told her she was wiser now and to ensure that the rate was fixed. She now regrets not doing so, especially with rate hikes in Florida’s homeowners insurance. That’s a different story.
I can’t help but wonder how fear hold so many of us back, myself included.
Once I get these student loans gone, I’m going to throw that amount at my mortgage. I can’t wait to do so. I honestly think I’ll be debt free including my mortgage in 10 years. I’ll see.
today I'll make my September mortgage payment (I like to pay early), for now I’m going to continue to add extra to mortgage, I’m averaging about $60 a month.
August 5th, 2023 at 01:10 pm 1691241013
August 5th, 2023 at 07:04 pm 1691262295
I hope you will spend some time doing math.
CDs, which are very saved are paying 5% or more.
If instead of sending money to your mortgage, you put it into a CR as part of a traditionalnIRA/401k you receive 10-22% return in the first year by reducing your taxable income.
Here’s the math.
$1000 extra to mortgage at 2.75% v $27.50 in interest
$1000 to IRA $100-220 one time tax savings, $50 in interest.
If, good forbid, you needed the money, you could recoup a portion of it by early withdrawal from thecIRA, all of it after your are 59.5. To recover it from the House, you’d have to sell the house.
I think paying off the mortgage is a fear based decision - fear of being homeless, fear of making bad investment decisions.
Play around with the math. Make th system work for you.