I have a stupid question?

Julie, that's a great way of tracking it, but what about when your records are different from theirs? When you need it the worst, proof is very handy, and a quicken spreadsheet is not proof. Cancelled checks, and/or receipts are required.

You made a great point though.....thanks

B

Check your statements. We had mortgages on two houses until June, both statements would itemize last months payment...what went where, what was paid out, what the remaining balance was, etc. Easy to check for errors.

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I'm not easy to live with, I know that it's true. You're no picnic either baby...

Don Henley

That's the point I was making. If my records were different from theirs then it's time to take my spreadsheet and canceled checks in and set them straight.

No, Quicken records are not proof. But then I've made it through a full IRS audit CLEANLY (which is really tough to do according to our accountant) using Quicken records and the back up receipts. Every year we pull down a disc with Quicken on it and send that to our accountant to do our yearly taxes.

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+1, I just went to get you the link for this, it is FANTASTIC in seeing all your options. Be sure to click the lower submit thing, to show the table, that had a tremendous impact on me when playing with different scenarios.

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it's me!

One note about refinancing, since a few folks here have mentioned it, and this might especially apply to homesteaders: Good luck finding a 30 yr.fixed mortgage anymore if you are classified as a farm. i.e., we looked into that, but since we had filed a schedule F (farm) on our taxes, NO ONE would touch us with a refi. Never missed a payment, good credit and all, we were told by everyone that we'd have to look at getting a business loan. Fugget about it. We're stuck with 5.25%

Anyone out there on the verge of re-financing and perhaps filing their first schedule F - do the refi first!

there are Financial institutions that will Finance Farms and Agriculture.

GreenStone Farm Credit Services is one.

I tried that one and could not get it to work right,would not apply the extra payment. I used this one for the examples in my previous post.

http://www.decisionaide.com/MPCalcul...aPayments1.asp

Circumstances allowed us to pay off our modest 15-year mortgage in the 4th year. Investing that amount of money then would not have yielded what not paying all those extra years saved us.

It may be somewhat irrelevant, but I paid for my house, then looked at a mortgage rate schedule, figured the value of my house, and saved that amount every month. For instance, if my house were worth 100 thousand dollars, and the interest rate were at 7%(or whatever rate is prevalent) the monthly payments would be $860. So using those numbers, I put $860 into a savings account every month. Which comes to $10320 a year. Or, $206,400 in 20 years. Plus interest. Not a bad bit of savings, considering that under other circumstances it would all have gone to the house payment.

OK, I gotta ask. WHY would anybody do that? You're just giving away your money.

if you make one extra payment per year applied to your principal, you would take almost 12 years off your mortgage.

I haven't read all of the posts, but some lenders will allow borrowers to do "principle reductions" that allow you to make a large lump sum payment and reamortize your loan. For example, say you owe $100k and have 23 years left to pay on your mortgage. Yoy can do a $20k lump sum payment and they will take the $80k and recalculate the payments for 23 years, so it will be less. There can be fees to do this, but they are about $100 or so, which is much less then refinancing. Depending on your current rate, refinancing may be a better option, but if your current rate is low, checking into a principle reduction may be a good idea.

You really need to check with your lender and see what the actual terms of your mortgage are. With mine I can pay up to 10% of the original amount every year (on top of the regular payments) without penalty, all applied to the principal, then I have the option of whether that additional payment is used to reduce the length of the mortgage or reduce the size of the payments (or some combination). No paperwork, no application, just a phone call and they mail me the new numbers to verify.

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The internet - fueling paranoia and misinformation since 1873.

NO for sure. Like a lot of people have already suggested, your extra payment will go towards principal and your monthly payments will not change until you apply for a refinance.

Call your mortgage holder, 8 years ago we paid down the mortgage by $30K specifically because the monthly payment would be reduced and it saved so much in interest and we did not have to refinance the mortgage. The ability to do so could very well be determined by the mortgage holder because we had no problem doing it.

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People say I can't multi-task. Well, I can tick you off and amuse myself at the same time.

It depends on the terms of your mortgage.

We have paid lump sums several times on our farm mortgages. Our mortgage note allows us to re-amortize (lowers the monthly payments) if we choose. There are no additional fees for doing this in our case.

We did refinance down some of our mortgages this year to take advantage of low interest rates. In order to get an even better rate we agreed not to make any extra principal payments for 3 years (or pay a penalty if we do or pay off early in those 3 years).

Mike