Jump to content

cv91915

My Early Mortgage Repayment Thread

Recommended Posts

With the 4/1 payment we've crossed the halfway point -- in under three years.

 

 

Since mortgage origination:

 

   18 regular payments (we were still paying off our other house at a higher interest rate)

+ 15 payments with additional principal (after the other mortgage was repaid at the end of 2017)

   33 payments total (out of 360 scheduled payments over 30 years)

 

Without the 15 additional principal payments we'd still have 93% of the balance remaining.

 

0qplaeW.png

 

 

With regular payments only it would have taken 220 months / more than 18 years / until October 2034 to get our balance down to this point.

 

zjgJ8yx.png

 

 

Share this post


Link to post
Share on other sites

We had 10% back offers for Lowe's (up to $13 back) on two of our Bank of America cards.

 

I went to the local Lowe's store and bought $130 in Netflix gift cards and loaded them into TAD's Netflix account.  They'll draw down on this credit balance month by month until it's gone, and then they'll revert to charging our credit card.

 

I also bought $130 in Amazon gift cards to use on future purchases with the same effective $13 discount.

 

The $13 +$13 back just posted to our checking account, so I've queued up this $26 to go with the rest of our 5/1 additional principal payment.

 

HW7qF8T.png

Share this post


Link to post
Share on other sites
41 minutes ago, cv91915 said:

We had 10% back offers for Lowe's (up to $13 back) on two of our Bank of America cards.

 

I went to the local Lowe's store and bought $130 in Netflix gift cards and loaded them into TAD's Netflix account.  They'll draw down on this credit balance month by month until it's gone, and then they'll revert to charging our credit card.

 

I also bought $130 in Amazon gift cards to use on future purchases with the same effective $13 discount.

 

The $13 +$13 back just posted to our checking account, so I've queued up this $26 to go with the rest of our 5/1 additional principal payment.

 

HW7qF8T.png

Rarely get anything I can use from BOA. A lot of restaurants - and I rarely eat out....    You have some good ideas though. I am trying hard to send another $500/month to principal, but realistically it probably won't be every month unless I can scare up an extra couple of hundred dollars .. $250-$300  is more realistic.  I do use all of my overtime pay towards the mortgage.

Share this post


Link to post
Share on other sites
12 minutes ago, Cactus Flower said:

Rarely get anything I can use from BOA. A lot of restaurants - and I rarely eat out....    You have some good ideas though. I am trying hard to send another $500/month to principal, but realistically it probably won't be every month unless I can scare up an extra couple of hundred dollars .. $250-$300  is more realistic.  I do use all of my overtime pay towards the mortgage.

I'm deathly allergic to chain restaurants, so I know what you're saying about the BoA offers.

 

I get more use out of Amex Offers (which are also generally more valuable), but occasionally there is something useful like this on our BoA cards.  

 

3XZbWIY.png

 

Your OT example is another great way to channel "extra" money toward something useful.  

 

The average person would just leave that money in checking and then let it dribble down their left leg, one Steakback Outhouse dinner at a time.

 

Share this post


Link to post
Share on other sites
Posted (edited)

Our $25.00 state tax refund just posted to checking, just in time to be queued up with $26.00 in Bank of America spending rewards (2 Lowe's offers x $13.00) that recently hit our checking account.

 

The rest that's ready to go with our regular 5/1 payment includes:
 

  • The fixed extra sum we add to the payment every month (other retired mortgage/auto loan payments, permanently eliminated recurring expenses, and recurring net pay increases from every raise in salary we have both received since we started this accelerated repayment process);
     
  • Maid service fee for April for the Mud Hut.  Since this place is continuously inhabited I don't like it when it goes without being cleaned for this long, but this is not my domain.  TAD's lack of organizational skills resulted in the service being skipped this month, so I'm using the current hygiene deficit for our financial benefit (though the need for cleaning service is approaching crisis status, so it needs to be done STAT).
     
  • Maid service fee for April for our place in San Diego, which I intentionally skipped since I was barely there this month;
     
  • Interest that's been accumulating in our liquid savings accounts;
     
  • Tens of dollars that pile up in our Lending Club investment account every month.

There are still a few days left this month, so there may still be an opportunity to squeeze in a few more dollars.

 

 

Edited by cv91915

Share this post


Link to post
Share on other sites

It has not yet been 3 years since we refinanced into our current 30-year mortgage, yet with our extra payments we have repaid more than half of the original balance.

 

Making just the regularly-scheduled payments we would have repaid just 7% of the original loan amount.

 

 

pANeA4U.png

 

 

We are currently ahead of our goal to have this loan repaid by June of 2022, which is 8 years from the date of purchase.

 

H7KyaE3.png

Share this post


Link to post
Share on other sites

I just cashed out some rewards on two of our Bank of America cards.

 

$ 48.73 from Cash Rewards Visa

    48.13 from Travel Rewards Visa

$96.86 additional queued up for 6/1

 

Share this post


Link to post
Share on other sites

Normally in the spring I have a mobile service come to the house to give the SUV an interior and exterior detail, which costs $200.00 with tip.

 

Since I'm about to get a different vehicle (and we're getting rid of the Prius), the RX will become TAD's main car, and he has zero automotive cleanliness standards.

 

The dealer washed the car when it was serviced yesterday, and I just went to a local self-serve car wash and spent $1.25 to vacuum it (no idea why the Lexus dealer won't do this).   

 

In the driveway I washed the floor mats with a strong spray of plain water from the garden hose, and I'm calling this good enough.

 

$200.00 - $1.25 = $198.75 extra principal on our 6/1 mortgage payment.

Share this post


Link to post
Share on other sites
1 hour ago, cv91915 said:

Normally in the spring I have a mobile service come to the house to give the SUV an interior and exterior detail, which costs $200.00 with tip.

 

Since I'm about to get a different vehicle (and we're getting rid of the Prius), the RX will become TAD's main car, and he has zero automotive cleanliness standards.

 

The dealer washed the car when it was serviced yesterday, and I just went to a local self-serve car wash and spent $1.25 to vacuum it (no idea why the Lexus dealer won't do this).   

 

In the driveway I washed the floor mats with a strong spray of plain water from the garden hose, and I'm calling this good enough.

 

$200.00 - $1.25 = $198.75 extra principal on our 6/1 mortgage payment.

I've long thought your nuts diverting every penny to your mortgage. I've had enough sitting in a high interest savings account to pay mine off for a little while now. The half a percent it costs me with the current ARM teaser to have the cash liquid seemed inconsequential. As I've been looking for a cheap house to rehab and rent or sell. With the housing market being ridiculous right now just getting the mortgage over with is looking better and better. I can always pull a HELOC to invest with even if your not supposed to buy real estate with one. Might have a chat with my banker and see if they'll let me in this circumstance.

Share this post


Link to post
Share on other sites
2 hours ago, oldblue said:

I've long thought your nuts diverting every penny to your mortgage. I've had enough sitting in a high interest savings account to pay mine off for a little while now. The half a percent it costs me with the current ARM teaser to have the cash liquid seemed inconsequential. As I've been looking for a cheap house to rehab and rent or sell. With the housing market being ridiculous right now just getting the mortgage over with is looking better and better. I can always pull a HELOC to invest with even if your not supposed to buy real estate with one. Might have a chat with my banker and see if they'll let me in this circumstance.

Actually, if I allocated every penny to the mortgage this thread would be one post long.  :lol: 

 

We fund everything else first (pretax retirement accounts, long-term savings/investing goals, etc.), so this is actually among our lowest priorities due to our impossibly low mortgage interest rate.

 

I will concede that not every part of this plan is mathematically optimal...  but this is really "leftover" or "extra" money I am allocating here.

 

Priorities may shift as of 8/1 when our rate adjusts and more than doubles from 1.74% to 3.74%, especially since we are investing new money pretty conservatively and expect that to continue.

 

BTW, you can get a HELOC just for liquidity...  just be upfront on the application.  

 

 

Share this post


Link to post
Share on other sites
On 5/8/2019 at 10:04 AM, cv91915 said:

I just cashed out some rewards on two of our Bank of America cards.

 

$ 48.73 from Cash Rewards Visa

    48.13 from Travel Rewards Visa

$96.86 additional queued up for 6/1

 

 

4 hours ago, cv91915 said:

Normally in the spring I have a mobile service come to the house to give the SUV an interior and exterior detail, which costs $200.00 with tip.

 

Since I'm about to get a different vehicle (and we're getting rid of the Prius), the RX will become TAD's main car, and he has zero automotive cleanliness standards.

 

The dealer washed the car when it was serviced yesterday, and I just went to a local self-serve car wash and spent $1.25 to vacuum it (no idea why the Lexus dealer won't do this).   

 

In the driveway I washed the floor mats with a strong spray of plain water from the garden hose, and I'm calling this good enough.

 

$200.00 - $1.25 = $198.75 extra principal on our 6/1 mortgage payment.

Today I used a $30 Visa gift card (electric toothbrush rebate from P&G) at the grocery store. 

 

I'm also adding this amount to the 6/1 payment.

Share this post


Link to post
Share on other sites
2 hours ago, cv91915 said:

Actually, if I allocated every penny to the mortgage this thread would be one post long.  :lol: 

 

We fund everything else first (pretax retirement accounts, long-term savings/investing goals, etc.), so this is actually among our lowest priorities due to our impossibly low mortgage interest rate.

 

I will concede that not every part of this plan is mathematically optimal...  but this is really "leftover" or "extra" money I am allocating here.

 

Priorities may shift as of 8/1 when our rate adjusts and more than doubles from 1.74% to 3.74%, especially since we are investing new money pretty conservatively and expect that to continue.

 

BTW, you can get a HELOC just for liquidity...  just be upfront on the application.  

 

 

 

Makes sense I guess its just way you do it, the whole I saved $10 this way so applied it to the mortgage concept is crazy to me. I'm terrible with budgeting in that regard my money isn't allocated anywhere, except the little bit that goes to an IRA automatically every week.  I'm cheap so I just naturally save without having to earmark anything.

 

I'm in the same boat I got a little over a year left at 2.75%, then it can jump 2%. I'll definitely be thinking more about it as that time comes if I don't do it sooner. Right now I earn 2.25% in a high interest savings and the mortgage balance is small so its costing me less than $200 a year to hold on to the cash.  Thats one bad thing about the HELOC plan is my rate will be higher if I do end up using it in the next year.

Share this post


Link to post
Share on other sites
On 5/8/2019 at 10:04 AM, cv91915 said:

I just cashed out some rewards on two of our Bank of America cards.

 

$ 48.73 from Cash Rewards Visa

   48.13 from Travel Rewards Visa

$96.86 additional queued up for 6/1

 

 

On 5/19/2019 at 10:47 AM, cv91915 said:

Normally in the spring I have a mobile service come to the house to give the SUV an interior and exterior detail, which costs $200.00 with tip.

...

The dealer washed the car when it was serviced yesterday, and I just went to a local self-serve car wash and spent $1.25 to vacuum it (no idea why the Lexus dealer won't do this).   

 

In the driveway I washed the floor mats with a strong spray of plain water from the garden hose, and I'm calling this good enough.

...

$200.00 - $1.25 = $198.75 extra principal on our 6/1 mortgage payment.

 

On 5/19/2019 at 3:00 PM, cv91915 said:

Today I used a $30 Visa gift card (electric toothbrush rebate from P&G) at the grocery store. 

 

I'm also adding this amount to the 6/1 payment.

 

tha4uym.png

 

New money market account bonus from Capital One posted this week... 

 

I'll add the bonus and the accumulated interest in this account to our 6/1 additional principal payment... so here is an extra $500.00 + 81.63 + 84.21 + 27.15 = $692.99.

 

Summarized in this post alone I've "found" more than $1,000 extra this month (so far) to put toward the mortgage principal.  This is on top of the recurring fixed amount we pay every month which is derived from previously retired debt payments, net pay increases, permanently-eliminated/reduced recurring expenses, etc.

 

Meanwhile, our higher-priority retirement and savings goals have already been addressed, as aggressively as ever, for this month.

 

Share this post


Link to post
Share on other sites
On 5/22/2019 at 2:51 AM, cv91915 said:

 

 

 

tha4uym.png

 

New money market account bonus from Capital One posted this week... 

 

I'll add the bonus and the accumulated interest in this account to our 6/1 additional principal payment... so here is an extra $500.00 + 81.63 + 84.21 + 27.15 = $692.99.

 

Summarized in this post alone I've "found" more than $1,000 extra this month (so far) to put toward the mortgage principal.  This is on top of the recurring fixed amount we pay every month which is derived from previously retired debt payments, net pay increases, permanently-eliminated/reduced recurring expenses, etc.

 

Meanwhile, our higher-priority retirement and savings goals have already been addressed, as aggressively as ever, for this month.

 

 

I just scheduled the additional principal payment for June, even though it's a day early.

 

I had to estimate some of the values I normally include (accumulated cash in LendingClub account, interest in various savings accounts that will post tonight, etc.).

 

At this point we have repaid 54% of the mortgage balance in 59 months.  

 

With regular payments only we would have repaid only 8%, and it would have taken us until June of 2035 to get our balance down this far...  so we have eliminated 16 years of regular payments so far.

 

 

KjSdURr.png

 

 

Share this post


Link to post
Share on other sites

On 7/1/19, the impossibly low 1.74% interest rate on our 3/1 ARM will more than double to 3.74% (the maximum single adjustment permitted by the terms of our note).

 

Options:

  1. Prior to the rate adjustment, pay the lender $295 to re-lock for another 36 months at today's 3/1 ARM rate (currently 3.24%)*
     
  2. Let the rate adjust to 3.74% on 7/1 and continue our accelerated repayment cadence.  
     
  3. Repay the remaining loan balance.
     
  4. Refinance elsewhere.

Deciding whether option 1 or 2 is the better choice is as simple as calculating the break-even point of saving $295 in interest at a 0.5% reduction in rate, and then estimating the months remaining at our current repayment rate.

 

We have an entire month to decide, so I'll spend some time evaluating options 3 and 4 as well.

 

 

 

* The re-lock feature of this mortgage product is unique, and it's one of the main reasons we chose this mortgage company.  

Share this post


Link to post
Share on other sites

Seeing the rate in which you are repaying this loan, I can't see how #4 would make sense given potential closing costs and the fact that 3.24/3.74 seem fairly close to the going market rate at this point.  Based on what I have seen for estimates on closing costs in a quick search, even a rate <1% would still come out behind given the time frame. 

Share this post


Link to post
Share on other sites

I recently used a 10% back (up to $13) Lowe's offer on one of our Bank of America credit cards (I bought $130 in Amazon and Five Guys gift cards for a net cost of $117, for future household use).  

 

Cash back recently posted to our checking account, so I queued this for 7/1:

 

PNM9MYG.png

Share this post


Link to post
Share on other sites

Cv, I applaud your efforts simply because they’ve brought great satisfaction for you.

 

But I’m scratching my head just a tad as to why you didn’t suck it up at the get-go and take a low fixed rate 15 yr mortgage.  I get the 30 yr (I presume) variable bought you quite a bit of flexibility.  But my gut sense is your nature is such that except under extraordinarily exceptional circumstances, you were unlikely to tap that flexibility.

 

After we sold our Philly house, we refi’d our 30 yr into a 15 fixed at 2.875%, 0 pts.  We have 8 yrs on it and I’m in no rush to accelerate.  Despite the risk, I’m confident I can do much better investing excess cash flow in a well-diversified portfolio.

 

As far as flexibility, we have a low rate HELOC as backup.

 

Share this post


Link to post
Share on other sites
48 minutes ago, hdporter said:

Cv, I applaud your efforts simply because they’ve brought great satisfaction for you.

 

But I’m scratching my head just a tad as to why you didn’t suck it up at the get-go and take a low fixed rate 15 yr mortgage.  I get the 30 yr (I presume) variable bought you quite a bit of flexibility.  But my gut sense is your nature is such that except under extraordinarily exceptional circumstances, you were unlikely to tap that flexibility.

We originally didn't plan to have this house for more than three years. 

 

When it was clear we'd be staying a bit longer we refinanced at the two-year point into this 3/1.  

 

The rate was so ridiculously low on this product it didn't make sense to do anything else (especially when we could re-lock as many times as we wanted for a nominal fee).

 

We are still (and have been all along) also investing and saving aggressively to ensure that we meet other, longer-term financial goals.  

Share this post


Link to post
Share on other sites

I would never suggest your saving habits were anything but exemplary.  Just merely observing that the yield on mortgage prepayment is rather subpar.

 

As far as the mortgage vehicle you opt for, if there’s a very strong likelihood that you’ll pay it off within  5 years  (which appears well within your intent), then your strategy is sound (at least in terms of interest rate risk).

 

But, so long as equity returns of 8%+ appear strongly viable over the mid-term, I choose not to lock up extra h/o equity yielding only 3%.  Still, if you pare the fixed income portion of your investment portfolio to the bone, and essentially substitute your added equity in it’s place (analytically), you pretty much arrive at the same result.

Share this post


Link to post
Share on other sites
39 minutes ago, hdporter said:

I would never suggest your saving habits were anything but exemplary.  Just merely observing that the yield on mortgage prepayment is rather subpar.

 

As far as the mortgage vehicle you opt for, if there’s a very strong likelihood that you’ll pay it off within  5 years  (which appears well within your intent), then your strategy is sound (at least in terms of interest rate risk).

 

But, so long as equity returns of 8%+ appear strongly viable over the mid-term, I choose not to lock up extra h/o equity yielding only 3%.  Still, if you pare the fixed income portion of your investment portfolio to the bone, and essentially substitute your added equity in it’s place (analytically), you pretty much arrive at the same result.

I'm not nearly as optimistic about the medium term.  

 

But you are right... but only up until I am.  :) 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines