I like to try various scenarios in a mortgage calculator, just to see what happens. I know, I'm a nerd, but I don't think I'm the only one on this site.
Given current information about our tentative mortgage:
(1) If we pay exactly the mortgage payment every month, and no more, it would be payed off on August 1, 2043, and we would have paid a whopping $197,371.80 in interest over the life of the loan.
(2) If we could pay an extra $330 a month toward the principle (no pre-payment penalties allowed in our state), we would pay if off on August 1, 2033, and only pay $123,891.33 in interest.
(3) If we could pay an extra $555 a month toward the principle, we would pay it off on December 1, 2029, and would only pay $99,430.18 in interest. This option is nice because our very first payment would be essentially split between principle and interest, and we would never have a payment where we paid more in interest than in principle!
Now, realistically, finding an extra $555 to put to the mortgage every month may not be reasonable, but it's still nice to see what the numbers are in different situations. However, I do think an extra $330 a month might be possible. Most likely, though, I will try to pay at least a little extra every month for now, and then once DS (and possible future DKs) are out of childcare we will have more to send to principle.
I will make $330 a month my tentative goal, and re-evaluate once I see whether it will be possible.
Also, when someone on this site used to post their extra principle payments, then used to include a table that showed which future payments had been eliminated by their mortgage chips. Is there an easy way to do this? I always thought that chart was pretty cool!
Playing with numbers
June 22nd, 2013 at 02:33 pm
June 22nd, 2013 at 03:10 pm 1371913833
Nope, you are in very good company here!
June 22nd, 2013 at 03:21 pm 1371914462
Saving Advice will e-mail you a copy of this reply, and you should be able to see my e-mail address. Just shoot me an e-mail, I will reply with my spreadsheet attached.
June 22nd, 2013 at 05:29 pm 1371922174
June 22nd, 2013 at 05:46 pm 1371923218
June 22nd, 2013 at 07:38 pm 1371929928
June 23rd, 2013 at 01:19 am 1371950352
June 23rd, 2013 at 03:16 am 1371957377