How long will it take me to pay off this mortgage

debrMay 19, 2007

Can someone help me figure this out, please. My current mortgage is a 15 year fixed at 5% that I took out in 2003. I have been making one extra payment per year. If I continue to make that extra payment, how long will it take to pay off the mortgage? Thanks for any help-I just can't seem to figure this out and the mortgage calculators I find on line aren't helpful to me.

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We need to know the original loan amount, the start date for the loan, the monthly payment and when you're making that extra payment. If you provide that info, I'll figure it out for you.

    Bookmark   May 19, 2007 at 7:01PM
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Also, is your mortgage company applying the extra payment to principal? They should, but I'm not sure they have to unless you so direct them. They could apply it as a regular payment, just a month early, they could even toss it into escrow I suppose. You probably get an annual statement that shows how your payments were applied.

    Bookmark   May 19, 2007 at 10:52PM
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A silly question: Why are you accelerating payments on a 5% fixed-rate mortgage? You'd do as well by putting the money into a 5% money-market account. You can always pay off as much of the mortgage as you like if rates drop, and meanwhile you have the money available for emergencies.

    Bookmark   May 19, 2007 at 11:38PM
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Sparksals-thanks for the help. The original loan amount was $195,000 and the first payment was June of 2003. The principal is $1549 and escrow is $753. I currently owe $150,000. I had been adding an extra $100 to the principle each month but for the past year have been adding $200 each month and plan to continue with that amount.

Alphacat-your thought is another option, but I really want to get the mortgage paid off. If I put the extra in a rainy day fund, I'm afraid it wouldn't make it to the mortgage payment

    Bookmark   May 20, 2007 at 8:23AM
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Using those figures, Quicken sez the loan originally would have ended 4/1/18 with a payment of $1235 (seems a month too soon, but whatever).

Paying $100 extra on payments 1-24, then $200 extra on paments 25-36 (you say that $200 was "for the last year", so I'm thinking that is June 06 to May 07, Quicken sez the balance now should be 149,425 (pretty close to your 150,000). So the numbers aren't lining up exactly - depends partly on the gap between the closing and the first payment... but close enough.

If you went back to the $1549 starting with the June payment, Quicken sez you'd end September 2017 with a last payment of $976, 7 1/2 months ahead of the original loan schedule. (=11,600 less in payments in exchange for that 6,000 prepaid to date.

If you keep prepaying $200 as is your plan, Quicken sez your last payment will be in March 2016 for $1439, just over two years ahead of schedule. (= 39,000 in payments saved in exchange for the 25,000 you are prepaying over the life of the now roughly 13 year loan).

Folks will argue you should keep the mortgage and invest that $200. There are ways to have it drafted and making it hard to get to. Most certainly you should consider investing instead if you have not maxed out your tax deferred retirement options. Unlike a "rainy day" fund, tht money would be pretty hard to get to.

(And I say this as someone who did choose to prepay a 4.75% mortgage! Every situation is different.)

    Bookmark   May 20, 2007 at 3:44PM
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We took out a $150,000, 15-year, 5.11% fixed rate mortgage in 2003. We threw every cent we could into additional principal payments, and it will be paid off in June of 2008. We really want it paid off as well.

    Bookmark   May 21, 2007 at 1:12PM
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Celticmoon, thanks for doing the numbers for me. I want to pay this thing off before I retire in 2013 so it looks like I need to speed things up a bit. The idea of saving the cash each month is certainly a good idea but my comfort zone is in paying off the house.

    Bookmark   May 23, 2007 at 7:46PM
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There was a substantiaal discussion here a ehile ago about using Money Merge Account, with several suggesting that, rather than paying these guys a substantial amount up-front to guide you and hold your hand, you can do it yourself and go really frugal for a while, making extra payments as you go ...

... and that the $3,000.+ fee could be paid down on the principal right away, instead of to the hand-holders.

If self-discipline is more difficult than some folks can handle ... others're willing to do it for them/help them do it ...

... for a fee.

Learning how money works ... an interesting hobby - that pays well!

ole joyful

    Bookmark   May 31, 2007 at 3:37PM
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ol joyful, I don't think the OP was talking about that scam of a progam. I think she just wants to accelerate payments on her own.

I do agree with you and it's a great reminder not to fall for those scams.

    Bookmark   June 2, 2007 at 1:59AM
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