I would love to know if anyone here pays extra principle on their homes?  Ok this may get a little long, but I will try to make it as short as possible.  My first morgage payment was Jan,06.  I have always paid extra principle started out $25, then it went to $50, $75, now I am paying $100.00 extra on principle a month, and plan to continue.  I havent been able to find a mortgage calculator to tell me how soon my house will be paid off.  I am not even sure where to start on the numbers.  If anyone here is paying extra on there mortgage, how do you know the progress you are making?   Any help would be appreciated.  Brenda

There are several web sites that have calculators that will show what you save by prepaying a mortgage. Bankrate.com is one of them, or just google "prepaying mortgage" and you'll find one.

We prepaid extra for years and paid off a mortgage in 14 years.

Or if you look in the forms for your spreadsheet software there may already be one made for you.

We are paying $150 extra per month. We knocked out 2 small bills to come up with this amount. We should have the note piad in November ofthis year. I use Yahoo finance calculators. When you play with the numbers and see all the possibilities, you really get motivated.

Bless you All,

Lynn

I am paying $50 extra per month on mine (all I can afford until the student loans are gone) - I set up a spreadsheet based on that, and my mortgage will be paid off 7 years early - not great, but before I retire (which is my goal).  However, every time I get a raise, I pay a few extra dollars to each of my bills - I'm concentrating on the student loans (highest interest rate - 7%) and the second mortgage (cheaper than PMI); when they're paid off, the payments for each is going to the mortgage, which will then be paid off in 2022, instead of 2033 as originally due - but I'll accelerate each of those as often as I can, so I'm aiming for sooner.

If you want to set up your own spreadsheet, you need an equation that looks something like this:   =SUM((D3+(D3*(annual interest rate/12))-payment))

In this equation, D3 (column 3, line 3) refers to the location of the original balance of the loan, or the balance in the previous month; the annual interest rate should be replaced by your annual interest rate, as a decimal (so 5.5% = 0.055), the 12 is 12 months per year (you can figure it out daily, but the difference is pretty minimal - and this will give you a good estimate; mine is usually within a dollar or two when I check it); the payment should be your actual mortgage payment - don't include insurance, taxes, or anything else that is added to your mortgage payment, or you won't get a good prediction. Once you have the equation set up, you can copy it into cells in the same column as many times as you need to make your projection.  I put the date down the left-most column.

You can then copy the equation to the next column and change the amount of the payment to see how much difference paying extra will make in your payoff date - and remember that anything extra you pay to principal is money you will never pay interest on again - just make sure your mortgage company is applying it as extra payment to principal and not overpayment toward the future.

You can use the same basic equation to determine the payoff date of any debt, by adjusting the interest, payment, and starting balance.

 

Thank you everyone for the great advice!  I was googling the wrong thing, I google mortgage calculators and not prepay mortgage calculators.   I also have never used a spreadsheet before, I didnt even know you could do that.  I don't have it input yet, I am not a computer or a math person, so I may have to call a friend to help me.   I also read on one of my googles that you can pay a 30 year mortgage in half the time, if you add the following months principle in your payment.  I am going to try this, I am not sure how long I will be able to keep it up, it could get to be a little much.  Thanks again!  Brenda

 We paid off a 15 year mortgage in 10 years. I did add the following months principal when I could. It works! Babs

If we want to pay extra toward our mortgage principal, we have to go down to the bank and make a transfer--we can't just add it to our regular monthly payment. So we wait until we have a lot of extra money in our bank account and then make a single big payment. We've owned the house for just over a year, and I just made my third extra payment today. By my calculations, if we can keep it up at the rate of two extra payments a year, we should have our 30-year mortgage paid off in a little over 10 years, God willin' an' the creek don't rise.

Ask your mortgage company or bank about making a large payment toward principal.  I have forgotten what they call it, but sometimes if it is a large enough amount at one time, they will completely recalculate your amounts and lower your payments.

When I took out my mortgage, I didn't have a computer.  I had $5.80 in my bank account.  I sat down with a calculator and a columnar pad and calculated each payment's principal and interest for 30 years.  I paid it in less than half the time.  One time, I had a large payment and calculated that I had just saved myself over $33,000.00 in interest.  :-)

You should be able to write a separate check and write a direction letter to your bank telling them to apply it to the principal of your mortgage.

Lynnea Berr:

You should be able to write a separate check and write a direction letter to your bank telling them to apply it to the principal of your mortgage.

Most likely so, but we don't normally write a check to pay the mortgage. It's an auto-withdrawal, just like my husband's paycheck is an auto-deposit. So making a trip to the bank is not much more trouble than writing out and mailing a check (especially since the bank is about a mile away and I go out for a walk every day anyway). Come to think of it, mailing a check would be more work for me, because first I'd have to figure out where to send it--I've never made a mortgage payment that way, so I'm not sure of the address.