Comments on: Have a mortgage? Save $71,000 in interest payments http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Fri, 12 Mar 2010 15:39:24 -0800 http://wordpress.org/?v=abc hourly 1 By: Deciding on Home Ownership http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-108462 Deciding on Home Ownership Mon, 17 Aug 2009 22:52:32 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-108462 [...] We also decided to go for a lower mortgage because we are planning to accelerate mortgage payments and save tens of thousands on interest. [...] [...] We also decided to go for a lower mortgage because we are planning to accelerate mortgage payments and save tens of thousands on interest. [...]

]]> By: The Most Powerful Force In The Universe: Compound Interest http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-104505 The Most Powerful Force In The Universe: Compound Interest Tue, 28 Jul 2009 11:04:14 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-104505 [...] be making what’s called  principal pre-payment. If you have a 30 year mortgage, you can save thousands by making extra payments. One of the best ways to keep yourself on the plan is automating your extra mortgage payment with [...] [...] be making what’s called  principal pre-payment. If you have a 30 year mortgage, you can save thousands by making extra payments. One of the best ways to keep yourself on the plan is automating your extra mortgage payment with [...]

]]> By: Latest mortgage news - Mortgage Rates On The Rise…T | mortgage http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-104247 Latest mortgage news - Mortgage Rates On The Rise…T | mortgage Sat, 25 Jul 2009 04:29:36 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-104247 [...] Have a mortgage? Save $71000 in interest payments I Will Teach … [...] [...] Have a mortgage? Save $71000 in interest payments I Will Teach … [...]

]]> By: Financial Guru Review: Ramit Sethi http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-104011 Financial Guru Review: Ramit Sethi Thu, 23 Jul 2009 01:10:16 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-104011 [...] and offers a rent vs buy calculator. If you do have a mortgage, Ramit offers optimization tips on decreasing the amount of interest you’d [...] [...] and offers a rent vs buy calculator. If you do have a mortgage, Ramit offers optimization tips on decreasing the amount of interest you’d [...]

]]> By: Kevin http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-102200 Kevin Sat, 27 Jun 2009 13:53:17 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-102200 I contacted my bank to electronically pay my mortgage every two weeks. There is a $4.00 setup fee and then a $1.00 charge per electronic transaction, which is $338 over the life of the loan to save $7000 in interest. Fees are a rip off, but the payback is worth it. I contacted my bank to electronically pay my mortgage every two weeks. There is a $4.00 setup fee and then a $1.00 charge per electronic transaction, which is $338 over the life of the loan to save $7000 in interest. Fees are a rip off, but the payback is worth it.

]]> By: camille http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-101912 camille Tue, 23 Jun 2009 13:28:57 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-101912 OK. I got excited ,so I called CitiMortgage. And I asked them if they apply the payments in their bimonthly plan or weekly plan immediately. No they don't! They simply have you pay a 12th extra, but charge you a percentage for their service. That is a real scam. CitiBank does not accept partial payments. Anyone can duplicate the same results of the bimonthly payments by simply paying an extra 12th towards the principle. It's easy to set up yourself online. OK. I got excited ,so I called CitiMortgage. And I asked them if they apply the payments in their bimonthly plan or weekly plan immediately. No they don’t! They simply have you pay a 12th extra, but charge you a percentage for their service. That is a real scam. CitiBank does not accept partial payments. Anyone can duplicate the same results of the bimonthly payments by simply paying an extra 12th towards the principle. It’s easy to set up yourself online.

]]> By: Kristen Sullivan http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-101839 Kristen Sullivan Mon, 22 Jun 2009 11:42:02 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-101839 The article and comments combine to make for some great reading. Ramit - you may not have gotten it exactly right with the post - but you sparked a terrific conversation. well done. The article and comments combine to make for some great reading. Ramit – you may not have gotten it exactly right with the post – but you sparked a terrific conversation. well done.

]]> By: Jill http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-101565 Jill Thu, 18 Jun 2009 20:22:57 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-101565 We bought our house in 2001 with a 30 year fixed mortgage at 7%. Refinanced in 2003 to a 15 year note at 4.875%, and between the interest rate decrease and buying a relatively inexpensive home to begin with, cutting 13 years off our mortgage ended up costing about an extra $100/month. So it was a small enough increase that we didn't cut into investing or other saving to make the switch. Back of the envelope numbers going from memory- Original mortgage amount in 2001: $119,000 Refinance amount in May 2003: $117,000 Current mortgage balance: $79,000 or thereabouts DJIA in mid-May 2003: call it $8600 DJIA on June 18, 2009: $8500 So short to middle term, paying down the mortgage came out significantly ahead of throwing more into the index fund. And although our state (Florida) is one of the big foreclosure places, my area didn't overbuild/oversell like parts of the peninsula did so prices are still higher than when we bought. Similar homes today are listing and selling in the $210K-$240K range. (and it's actually kind of hard to find that sized started home in our area, so prices are pretty stable right now) Since we haven't gone the HELOC route (though we're thinking of doing so later in the year to deal with some window/roof/flooring issues) if we had to sell, we could price under current market and still walk afay with six figures in our pockets. Way it's worked out for us, I'm glad we didn't put the extra $100/month in the mutual fund instead. We bought our house in 2001 with a 30 year fixed mortgage at 7%. Refinanced in 2003 to a 15 year note at 4.875%, and between the interest rate decrease and buying a relatively inexpensive home to begin with, cutting 13 years off our mortgage ended up costing about an extra $100/month. So it was a small enough increase that we didn’t cut into investing or other saving to make the switch.

Back of the envelope numbers going from memory-
Original mortgage amount in 2001: $119,000
Refinance amount in May 2003: $117,000
Current mortgage balance: $79,000 or thereabouts

DJIA in mid-May 2003: call it $8600
DJIA on June 18, 2009: $8500

So short to middle term, paying down the mortgage came out significantly ahead of throwing more into the index fund. And although our state (Florida) is one of the big foreclosure places, my area didn’t overbuild/oversell like parts of the peninsula did so prices are still higher than when we bought. Similar homes today are listing and selling in the $210K-$240K range. (and it’s actually kind of hard to find that sized started home in our area, so prices are pretty stable right now) Since we haven’t gone the HELOC route (though we’re thinking of doing so later in the year to deal with some window/roof/flooring issues) if we had to sell, we could price under current market and still walk afay with six figures in our pockets.

Way it’s worked out for us, I’m glad we didn’t put the extra $100/month in the mutual fund instead.

]]> By: InspectorFox http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-2/#comment-101451 InspectorFox Wed, 17 Jun 2009 20:09:12 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-101451 Amortization Schedules and Principal Prepayment, Part 1: Shortening a 30-Year Mortgage Into 15 http://www.mymoneyblog.com/archives/2009/04/amortization-schedules-and-principal-prepayment-part-1-shortening-a-30-year-mortgage-into-15.html Amortization Schedules and Principal Prepayment, Part 1: Shortening a 30-Year Mortgage Into 15
http://www.mymoneyblog.com/archives/2009/04/amortization-schedules-and-principal-prepayment-part-1-shortening-a-30-year-mortgage-into-15.html

]]> By: Daniel http://www.iwillteachyoutoberich.com/blog/lower-your-mortgage/comment-page-1/#comment-101032 Daniel Fri, 12 Jun 2009 20:08:58 +0000 http://www.iwillteachyoutoberich.com/?p=2959#comment-101032 Ramit, I followed the link to your book excerpt and in there you give opposite advice - that money invested in an index fund will outperform mortgage prepayments every time. So which is it? Ramit, I followed the link to your book excerpt and in there you give opposite advice – that money invested in an index fund will outperform mortgage prepayments every time. So which is it?

]]>