ST Alpha - "LIR: ceregon take the prepaid rent, put it on the mortgage" (Reading a Post)

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LIR: ceregon take the prepaid rent, put it on the mortgage

Posted by zeitgeist Dec 1 '08, 10:24

rule of thumb is that if you pay an extra 100 a month you can pretty much tear the last month's payment out of the book as that extra money all goes to the principle

when we refi'd from 6 down to just a click under 5 (that saved us 20% in interest cost we also opt'd for a 15 year mortgage which only cost a 100 more per month

giving them a couple thousand now could save you 8-10 x that in 25 years

Responses:

I understand the power of compound interest, but paying off a mortgage is only earning 6% (less because of the deductibility of interest), of course.. - ceregon Dec 1, 10:36 4
- I was gonna say, what investment will pay that high? -- nm - loosilu in Algiers Dec 1, 10:40
- but by reducing the principle, you're getting that 6% over the entire remaining period of your mortgage. -- nm - znufrii Dec 1, 10:39 2
  - for example: if you pay down the pinciple by $10,000, you can save up to $40,000 in interest payments over the life of a 30-year mortgage - znufrii Dec 1, 10:47 1
    - (this is if you make the extra principal payment at the beginning of the loan, and still keep your monthly payments as they were) -- nm - znufrii Dec 1, 10:48
I think everyone's telling ceregon to take the money, but I think he wants a reason not to take it. - Mop Dec 1, 10:32 1
- let's not forget that is not free money, the roommate's half the mortgage still has to be paid monthly, interest will probably only be 150 or much les - zeitgeist Dec 1, 10:40
Ditto! -- nm - lileve Dec 1, 10:26

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LIR: ceregon take the prepaid rent, put it on the mortgage

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