Fastest way to pay down mortgage

Ah a kindred spirit. I like your analogy about debt being like a front locker. Debt used wisely will make for continuous progress even though the road is difficult. And like a locker, debt used unwisely will leave you broken, stuck in the mud, and looking at big bills to get going again.

I wish someone would have taught me about money when I was a kid, and I don't mean the endlessly reposted stuff about no debt. I mean investing, taxes, debt, unexpected expenses, OPM, saving, retirement, the list goes on. It took far to long to figure it out on my own and I still have a lot to learn.

 

0.9% seems too good to be true, but damn I'd take that any day of the week. When I bought my last car I put nothing down. The guy at the credit union kind of looked at me funny, like don't you want to put something down, or this guy can't afford that car. But, my credit is good and I had proof I could make the payments, so they did the loan. What I didn't say was I have investments that could liquidated and used to pay cash for the car. By not doing that the investments do the work of making the payments.

All that said when someone is living paycheck to paycheck it can be impossible to get out. I've been lucky, there's no doubt about that.

 

How much would you guys pay off on a 145k 3.5% 30 year loan before saying; ok, that’s enough I’ll invest in other stuff now that it’s below xxxx amount.

 

None over the minimum monthly.

At the moment, I see a lot of banks with offers for no fee, high yield savings accounts with a 4.30% interest rate (PNC for example). Build into that and when (or if?) it ever drops below the 3.5%, then put into your mortgage.

 

My parents are very frugal people. We grew up in a nice area that on paper was beyond their means, but they had been wise plus lucky in a couple of ways. My dad's job got transferred from MA to NY and then back less than a year later, both times it came with a good pay raise and at least one of the 2 times help with the moving expenses. My dad would also put a lot of sweat equity into the houses and eventually by watching the market (which he always enjoyed) was able to get a new house in that area. They also never bought expensive cars or anything really that wasn't a total essential..we didn't have cable TV until I was about 25, nor did they ever buy gadgets like a VCR. Never really carried debt other than the mortgage and didn't have credit cards.

I was not always wise about money, despite seeing and learning from them. I've gotten much better as an adult though. At my peak I had $1500 in credit card debt. My sister on the other hand has expensive taste and could care less what something costs, but how much is the payment.

I at first was a little leery but it was no bull. Figured they'd try and hit me with a higher rate on the way out but they didn't. $200 a month for 60 months at that rate, let's just say I didn't rush to pay it ahead of time and instead dropped what I could have paid extra on house projects/mortgage payment.

Definitely agree re paycheck to paycheck. Takes luck and wisdom, plus some restraint.

 

This is where Im at. Refinanced my 30 year, to a 20 in 2019. Was charging my roommate my mortgage, but still paying my normal payment too. Then got married, and had to kick out roommate.

Now wife and I split all the bills, she gives me her half at the end of each month plus i save about half of what she gives me. I cover the normal mortgage myself. Then I combine all of that and put it on principle every other month. Hope to have the house paid off in 2-3 more years.. (currently owe 60k. I bought my house new in 2013)

I still splurge on myself once in a while. Life cant be about paying bills the whole time

 

Teaching that stuff in public school will never happen. The powers that be need workers. How to you assure plenty of working class? You sell the American dream to them. Big houses, lots of cars, 2 kids to put through college. Then you work to keep the dream alive. If we all suddenly started living within our means it would really fuck up the system. lol

 

I wonder how often Dave Ramsey changes his oil? Couldn’t resist, also a Ramsey fan.

I saved up and made big extra payments, keeping enough for emergencies. I paid off my house just 6 weeks before being laid off. It sure was easier looking for a job debt free.

 

Time is key. We are on our 2nd refinance. Initially paying quite a bit of interest but we aren't gonna dwell on that.

History...started with an 80/20 split 30yr mortgage in 2006 can't remember the interest rates for each.

First refinance, 3.7% in 2013 for 20 years.

2nd was Refi/Cash-out 15 year mortgage in 2021. By this time we had paid down the principle balance and had $75K+ in Cash-out.

The appraisal helped out considerably...our house was valued at $86K more than we originally paid for it.

Deleting escrow and paying our annual property taxes and monthly home insurance made the mortgage payment a little less than what we were already paying.

Now we are putting money into savings and increased our 401Ks and Traditional IRA/Roth IRA amounts and investing in T-Bills.

Make the most of employment now because at some point, everyone's plan is to stop working. (Most everyone...lol)

 

That's great. The weight off your shoulders when you paid the house off must have been huge. I can't wait for the day. We are about to start tripling the mortgage payment which should get us there in about 4.5 years. According to my mortgage co calculator, that will save me 98k in interest.

 

I love how this thread attracts randos with financial advice.

 

I'm not a financial advisor but I play one on TW.

Disclaimer: This is not financial advice and is only my opinion. lol

 

I paid my 30 year mortgage off in 11 years. When I bought my Tacoma on a 48 month loan, I ended up paying it off in 3 payments.

I just hate making payments, and being in debt.

Hell...I'll have to pay taxes and insurance till I'm dead and bloated, but I can't do shit about that.

 

Ideally you only want to make one payment a month. Extra payments in a month don't cut down on that next payments interest. So just save the cash for the next payment.

Paying biweekly doesn't change interest. It used to but in nearly all cases when you set up biweekly payments in your mortgage, it still only considers 24 full payments a year. Banks figured out how to get their interest back on those.

We paid off our home by having a nice slim budget and then everything extra we threw on the mortgage, which was significant for us ($1500-$3k a month). We got extra jobs to throw cash down.

We bought cheap and it was a deliberate focus for us to pay off the home ASAP because we could do and did do it in 3 years so we kind of went balls to the wall. I wonder if we would have had the same motivation if we weren't in the same position to seriously underbuy in home and have the cashflow to do it. We are currently going balls to the wall on retirement so I guess it's just our nature.

 

That's just it, make a little extra each month on the one check you send.

I never looked into a biweekly mortgage, though we do kinda use that technique on our house budget. The 2 months we get a 3rd check it's never planned for so it's a savings or if we have a big bill/repair job.

Very impressed you got it done that fast. My second job that I've had since 2009 is just for the car payment and maybe a little extra fun money.

Retirement is the single best thing to go all out with. For a few reasons.

 

Awesome. I refi'd at 2.8 a few years ago and now regularly making triple payments every month.

We briefly looked at moving for work, but that didn't last long. I can't imagine choosing to buy into a 6-7% mortgage. For the same loan it was another ~$500/mo in interest. I feel really bad for people that are home shopping right now.

 

I was paying extra like you. But after advice from this thread, I decided to open a high yield savings account paying at 5.05 now. The money is not tied up and if it ever dips below my interest rate I can always do a lump sum.

 

And sometimes lenders will let you re-cast with large principle down payments.

My husband was at risk of losing his job in 2020. He made pretty decent money and because he has no degree we knew he probably wouldn't replace that salary if he had to go out and find something else. So I figured while we got the income, lets use it and pile it on the house. Our new refi was for a 10 year mortgage and I made so little if we lost his income Uhhhh it would be tight. We knew we had the option because we had paid down so much principle we could re-cast and lower the payment so it would be more manageable on my income. So sometimes that's always an option if shit hits the fan.

It made us feel safer being able to pay down the house but still have it benefit us if something bad happened. It's not like that money was gone.

 

Solid idea too. Depends on your position in life as well of course. For us we are older so eliminating the mortgage would be huge if not vital to our ability to live here.