2 EASY Ways To Pay Your Mortgage Faster | Our Mortgage Payoff Balance & Monthly Statement
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- Опубликовано: 28 авг 2024
- We aren’t attacking our mortgage payoff yet as first time homeowners but we are paying it down more quickly with two super simple steps we never even notice!
In this video I cover:
➝ our monthly mortgage statement breakdown
➝ what we've paid on our mortgage in 3 years
➝ 2 ways we are speeding up the mortgage payoff
➝ Our House Price & Mortgage Details | Buying Our First Home ➝ • Our House Price & Mort...
Paying off your home mortgage loan is a dream for many of us. I've been working on paying off our mortgage faster with two very simple tactics that we barely even notice every month. We have paid down our mortgage faster by several years by using these 2 easy mortgage payoff tactics.
Thanks to using these two mortgage payoff techniques we were able to pay off enough of the loan to get to 20% equity so we could refinance and drop PMI!
➝ Refinancing Our FHA Mortgage Loan To Drop PMI ➝ • Refinancing A Home Mor...
I plan to keep using these mortgage payoff tactics because it drastically speeds up paying off your mortgage without you even noticing!
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**The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. Investing entails risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time. I am not a professional and this channel is for entertainment purposes only. Do your own research!!
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Awesome video!!!!!! I pay $100 a month towards principal every month. I been doing this for 2 years now. Just wish I started years ago but better late then ever.
I really like your video and how you break it down people need to make sure they pay credit cards and bill before sending extra money for a mortgage that should not be more important than making sure your up to date with every other bill
Your videos about buying a house are so helpful! Like everyone, I’d like to buy a house one day. Nobody in my family has ever owned a house so all my questions have gone unanswered. Your transparency has taught me a lot! Thank you!!
I'm so glad! I'm doing this videos because I'm hoping they help people, especially if you want a house but don't know many people that own them. I basically shared this info with a sibling who was buying a house and realized... someone on youtube might be able to use it too!
If run the numbers into an amortization app, every dollar extra you pay in the first year of the loan, pays down approximately 3 dollars in interest. Pretty cool! In the first 5 years of a loan, it’s critical to pay down extra principal to achieve maximum benefits.
Thank you for being so honest & transparent ; satisfied my nosey self😉, will continue to support your channel. Good content
Lourdes Banks same lol
Thank you!
Great
I love how transparent you are!!! You have no idea how much of a God send this info is.... I’m saving up to buying my first house so I’m researching everything... Now i know i have to ask my mortgage lender if there is a prepayment penalty because I definitely plan to pay off my mortgage as fast as possible 🤗
I’m so glad I could help!
Checking for a prepayment penalty is so smart! It’s the one thing I’m glad we did so we are paying off our home faster!
Buying your 1st house has so many emotions tied to it, but it's so worth it! I just bought my 1st house last December. I work in mortgage servicing, so I've learned a lot on my job! Also ask your lender about the escrow. When do you get your annual escrow analysis, when are taxes & insurance due, is there a minimum required balance needed in your escrow account. This is the thing that could cause your monthly payment to go up or down the most. And it's the thing I seem to talk to my customers about the most. Watch your monthly statements closely & find out if your lender has an online portal available so you can watch your account also. The more info you have going into being a home owner, the better off you'll be!
Great video! Thank you for showing real life numbers! For me it's one thing to see it in a calculator and another thing to see it in a statement. Thank you very much!
We have always paid a little extra but are paying more so that $500 per month goes to principal. At this rate we will have it paid off in 71 months.
That is awesome!
That's great🎉
I don’t even have a mortgage anymore (yeah for us) but still watched since I love your videos 💜
+JMJM1 ❤️ thank you so much!
I like the way you don’t slam renters. Just now discovering that renting may not that be a bad option for some.
Renting is a very valid choice in a number of situations! I don’t think anyone should feel bad about renting.
Great tips and you should be proud of the progress you’re making! We are saving up to buy land in cash and then self build.
That sounds like an awesome adventure!
This is the most average house payments us people have . Thanks for the great video. Bought a house same price as yours , but I put an extra 350.00 to the principal, and it makes a big difference knocking the interest down.
Thank you! You are doing great!
This video is awesome! I had never pulled out our payment and amortization schedule or looked at the billing statement before and I have owned this house since 2016. (Bad consumer!) Your videos have filled my whiteboard in my home office with all kinds of fun coloring sheets and debt payoff schedules. You rock!
I’m so glad it was helpful! Yay! Thanks for watching!
What a great explanation. Out mortgage company does the same we’ve only been play 32 dollars more a month but we’ve knocked out 4 payments in 1 1/2 yrs
Nice work! It’s amazing how much can be knocked off by little payments each month!
Congrats!
If you're looking to put more towards principal without hurting your wallet too much, biweekly helps a ton, with a little additional each month to round up. Another little trick I've found is that once your monthly payment is satisfied, look at your principal balance. Pay whatever will get you to the next $100 mark. Example would be if your unpaid principal balance is $121,213, pay the $13 to make it $121,200. Really isn't much at all & you won't feel the pinch. Every extra $1 you pay towards principal now/early will save you interest.
TFS. Valuable point about paying mortgage interest and renting. You also highlighted the value in looking at your statements and seeing the actual numbers. Bonus for you seeing the whole payment going to principal 😁
Yess, I thought they were later in the year but it's always fun to see the extra payment that goes straight to principal!
Wow 3.6 percent is awesome, this was a great walk through for the beginning homeowner who hasn't a clue about their new statement.
like#57
Thank you!
Best thing to do is look at your statement, write down questions you have & give your lender a call when you have time for a lengthy discussion. If the 1st person you talk to makes no sense, ask to speak to someone else or call on a different day & time.
The way i got rid of my pmi 4 years early is appraising my home since the market of home went up. Fortunately i met the 20% that was required to get rid of pmi. I now put that pmi cost i was paying towards the principal and it cut my mortgage term down 3 years. Instead of giving money away toward pmi, its now working for me. :)
That’s actually what we are doing now! Great job!
@@PenniesNotPerfection good! It really worked out. :)
Check out our Mortgage Refinance & Closing Cost Details (Real Numbers & Paperwork) ruclips.net/video/7Lq6-0OnQC4/видео.html
Super informative! Thanks for sharing!Before you know it house will be paid off ! Always pay additional to the principal !
I hope so! I would love a paid for home!
Financial education is so important!! Great job teaching from experience!!
Yes! Thank you!
You hit so many key points here!!! People definitely be nosey lol s/o to your A1 budgeting skills tho! Congrats on the rapid painless process 👏👏👏
You’re doing great! It’s a long road but it’s so fun to watch it getting shorter over time. Thanks for sharing!
Making me want to actually pay attention and read to our bills ☺️
Ha!! Do it!! It really can be helpful! I get bored with it sometimes but I've caught mistakes on other bills and the mortgage ones are fascinating to me.
Hahaha...this comment made me chuckle
Thank you so much for your transparency! Learned more in 10 minutes than all the time spent speaking with brokers.
So glad! That’s why I make these videos! ❤️
Payed off my home also, it’s a great feeling❤️
This is so helpful I am looking into buying a house soon and this give me even more confidence I can buy. My rent is $1,600 and i'm over Apartments ughhhh lol
Great! It’s awesome to escape apartment life.
@@PenniesNotPerfection yessss
Great Video… I'm headed to the bank to make extra payments to my mortgage today.... in California.
Great job! I’m sure that California mortgage is no joke!
Wow, this is insanely helpful! Thanks for sharing!
Glad it could help!
Wow.... Great video and the fact your still responding to comments a year later is amazing. Thanks for being amazing.
Thanks! I truly just want to help people if they think this is something they want to do!
Great video. You know I understand my mortgage statement like th3 back of my hand...lol
Yeah you do! You are my inspiration!
I love house buying stuff & can't wait until we're there one day!! Thanks for sharing so much info!😊
+Mrs. T is Going Debt Free You’ll be there before you know it!! Buying a house is so fun but also nerve wracking!
Before you know it your house will be paid off. Keep it up!
I hope so! I figure between our extra payment per year and $70 a month extra we will definitely not be paying it for 30 years!
I tried to get us on a biweekly payment plan but our mortgage company said they would take the first payment and “hold” it until the second payment came in. Then they would apply it like it was one mortgage payment so it would not save us any money nor pay down the mortgage faster. 😔 So we just pay an extra $150 a month on the mortgage along with the normal mortgage payment.
Same here! Does anyone know a way around this or am i stuck just adding to the payment
Are you sure you understood correctly? Because that's what my mortgage company does too! They take the payment and hold it in "unapplied funds" until I make the second payment and then it's one payment. The place where it pays off the mortgage faster is the fact that because it is biweekly you are actually making 26 payments a year but you only need to make 24 to cover the 12 months payments. That means the extra 2 biweekly payments are applied to the principal as one FULL PAYMENT extra per year. That might be equivalent to your $150 a month extra, I don't know, but it sounds like maybe you misunderstood how the biweekly actually makes it pay down faster? Might be worth calling them again!
@@RachelTsTime That's what my mortgage company does too! They take the payment and hold it in "unapplied funds" until I make the second payment and then it's one payment. The place where it pays off the mortgage faster is the fact that because it is biweekly you are actually making 26 payments a year but you only need to make 24 to cover the 12 months payments. That means the extra 2 biweekly payments are applied to the principal as one FULL PAYMENT extra per year. That might be equivalent to your $150 a month extra, I don't know, but it sounds like maybe you misunderstood how the biweekly actually makes it pay down faster? Might be worth calling them again! Some companies don't do biweekly payments at all but biweekly payments pay off the mortgage faster because they are basically you making an extra payment per year.
Mortgage doesn’t accrue interest daily like a credit card. Interest is charge monthly so it doesn’t matter.
To answer this question...interest is paid in arrears, meaning the interest you're paying in the current month was calculated in the previous month. It's only calculated once on the 1st of the month so no matter when your payments are applied, it doesn't mean you're paying more or less interest. Example being if your monthly payment is $1500, $500 principal & $1000 interest that's due on the 1st of September, the $1000 was calculated on what was due August 1st. All the payments that come in during August will reduce the principal balance, but the next interest calculation will happen on September 1st. If your principal balance on August 1st was $150,500, and you pay biweekly or monthly plus $100 additional principal, they'll recalculate interest on September 1st on the $149,900 not the $150,000. Trust me, it works how it's supposed to. The way you're saving interest is during the year on the biweekly payments, you're paying a 3rd 1/2 payment in 2 months. So if you pay $1500 for your monthly payment, 2 months you're paying $2250 with $750 going directly to principal. You lower your principal balance by the 1st of each month & it saves you $. Ask your lender to run an amortization schedule for your current monthly payment with nothing extra, another with biweekly payments & another for making 1 lump sum payment during the year. Or find an amortization calculator online & play around with the #'s.
I heard if you make I extra payment a year towards principal. Depending on your interest rate you could take 8 years off a 30yr mortgage. Keep up the great work.
Yes I’ve heard that which is why we wanted to do the biweekly payments to make an extra payment each year!
My plan is the accelerated biweekly plus an extra payment at end of year. Hopefully I can stick to that.
Did you have to request biweekly from mortgage company or you just arbitrarily started sending biweekly payments? There was no fee charged from Lender to make these type of payments? Keep up the great work. Love videos.
@@bobbysalazar5008 some lenders don't accept anything other than regular 1 time monthly payments. Call & ask if they'll let you send biweekly & additional principal payments. Some lenders will accept any payment, but instead of applying those funds to additional principal, they'll apply it to your next monthly payment, which doesn't reduce the amount of interest you end up paying.
Wowza - you guys are doing great!!! Really good explanation as well. Those taxes and insurance are a killer. We do the same thing and have everything bundled together... Our property taxes are close to $1k per month, though... Ugh. Ah, well.. You'll be done before you know it!!!
It is! I’m sometimes tempted to move out of the city for cheaper rates but maybe one day! I can’t imagine that much in taxes a month!
Contact your tax assessor & ask if you qualify for any incentives to lower your taxes. I've seen incentives for being 65+, or disabled, or a Veteran, or a few others. Shop around for home owners insurance every couple years. You'd be surprised how much you could save sometimes.
My guess is that you REFINANCED in 2020 since you can lower that rate AND remove PMI. Keep up the good work!
You are correct. We refinanced to remove PMI and got a 2.75% rate on a 15 year. :) Waited over 3 years to finally get a deal that made sense for us and was thrilled!
I shared those details too: ruclips.net/video/7Lq6-0OnQC4/видео.html
Pennies Not Perfection - AWESOME! Seeing that amortization of a 15yr at 2.75% is so cool for us math nerds! Chunking off principle each month adding to your net worth. 🏡😁
Yeah we doubled the amount going to principal each month without changing our payment. IT IS A MATH MIRACLE!
I’m rounding up the payment as well as doing one extra payment a year on my mortgage to help build as much equity as I can. Also doing some home improvement projects to help increase the value. Some are just nice to have done for me as well such as rewiring the electricity to update to three prong outlets.
This is a very good informative video. I’m also being very aggressive on my mortgage with doing double up payments/ principal only payments
Glad it was helpful! Great job!
Thanks for the tip! Love the transparency, really helps to see a real life scenario.
Great information, thanks for sharing!!
Thank you! Thanks for always watching! :)
Thank you for taking time out to share your success. We also have the same mortgage company as you and thank you for the explanation on the itemized payments.
Wow!! Thanks for sharing!! I really enjoyed this video!
Thank you!
Thanks for sharing this is very helpful ❤
When I started actively looking at houses, I had to get a pre-approval, and I did for $20,000 down. That was the hard limit I set for myself. Fast Forward to my offer getting accepted, when I go to get the loan approved, I'm now told it's gonna be have to be a total of $40,000 down with a 7% interest rate. And because the loan had to be approved within 5 days of the offer being accepted, and I had already gone through so much with my provider, I didn't really have the time or the energy to try and shop around. I definitely rushed a lot I probably shouldn't have but I do really like my house so mostly win I guess
Good job on this detailed video. Banks won’t even sit and explain your amortization schedule with you. They just show it to you because of the truth lending act
Ask them to send you an actual amortization schedule! Or you can look up amortization calculator online & play around with the #'s. It's always a good idea to know as much as you can about your loan. It's the biggest purchase most people make!
Excellent video!!
Love the breakdown and detail! Thank you for sharing :)
Appreciate your honesty!
Thank you!
Sometimes the lender does not let biweekly payments benefit you. SunTrust for example scheduled a biweekly payment but holds the first payment in a suspended account until they collect the second payment. Then both are applied to your balance. The key is to make 1 extra full payment to the principle at the beginning of the new year. Or you can average your monthly payment over 12 months and schedule a monthly amount that totals 1 full payment. To date we have trimmed 5 years off our mortgage which saves us about 20k in interest. Don’t let the banks take more than you have to!
CMB Music Productions yep some banks don’t allow it but getting a good lender will. One extra payment per year does the same thing.
5:18 Just the magical words I wanted to hear 😌 New Subscriber!!! What a great channel! I wish high schools and even middle schools would incorporate channels like yours to Economy classes! I graduated four years ago and all I roughly remember was Guns and Butter or Bread and Butter whatever it was!
Haha, laughing at the guns and butter. Thanks for watching and subscribing!
Ha! We have the same mortgage company...I was looking like that statement looks really familiar...Lol
Ha! I was wondering if anyone else would have them!!
I love how easy they make it to conduct business with them. What I don't love is I used to be able to make several online payments multiple times a month for free...and that option is now gone, they charge a fee if you call to do it over the phone...so now I have to just make my extra payment with I pay my mortgage...this this month's extra $5000 payment will be paid with the June mortgage.
Pennies Not Perfection I also have this mortgage company so your statement was very familiar! I’m going to start paying $100.00 extra to the principal each month.
I guess I missed it but how does paying your mortgage bi-weekly versus one payment benefit you? Thanks!
@@lisadearing5960 With biweekly mortgage payments, you make 26 half-payments a year, equaling 13 total payments in a year instead of 12 payments. The "extra" payment will go entirely to your principal balance of your loan.
This was such a great video. Very insightful! 🙂
Thank you!
If you have PMI and have made enough payments to bring your house value ratio, between payments and equity, you can ask for someone through your lender to come and evaluate your value of your home, and you can get the PMI off. Think i paid 250.00 fir this to happen. Soo worth it
You can’t do that with an fha loan, you have to refinance. But you can with conventional mortgages which is great! We removed ours with a refinance in 2020.
I became a new subscriber due to your transparency
Welcome!
thank you for your advice ! it was explained so clearly
Interesting to see how morgages are organised in other countries!
For sure! I know it’s so different in other countries!
I do extra $1200 month towards principal.My PMI will cone off when i hit 20% LTV and then the PMI will be in addition to the 1200 principal. Im looking at 5 years payoff time.
Great job! 🎉🎉
such a beautiful channel you have here. l Love all aspects of your channel,and am happy to subscribe here.l,m evo form Australian
Awesome! Thank you!
Great way to pay down your mortgage faster!
It’s so painless!
I like how you are paying bi-monthly.
Gonna pay that mortgage off like you!
You have great hand writing
Thank you so much 😀
Money Mom sent me over to you! I have subscribed and look forward to watching your videos.
Awesome! Thank you! Welcome to my channel and thank you for coming over. I love Money mom!
This year I have set up Bi-weekly payments hope to see my principal reduced. Thanks 😊
thanks for this video. Just bought my first home im jealous of your mortgage payment because NYC is WAYYYY more expensive lol.
Glad it was helpful! TN is much cheaper than NY in general for sure. I did buy a starter home in a middle class neighborhood too which helped!
Very helpful video 👍 thank you
Glad it was helpful!
I love the way you illustrated the method using your own example. No other video have done that. Question? Did you send a separate check or did you pay online?
I pay online!
I started adding 300 dollars to my principle each month and I’ll have the remainder of my 30 year home loan paid for in 11 more years. I just started doing the extra payments and have been paying my mortgage since 2008. So technically my mortgage will be paid for in 21 years vr 30. I wish I would of started this 10 years ago. Now my goal is to have this paid off in the next 11 years.
Could you do a video on the pros of doing half payments? Can you do it with other things
Yes I will! And yes you can depending on the terms of your loan and the company that services it.
I have the same mortgage company. We just refinanced . I'm trying to pay extra each month on principal.
I had no idea there was a prepayment penalty 😩 thank you
There is not in my loan or probably a majority but some loans will have one.
Good job paying off the house 🏘️
Way to go girl!!!!!!
Thanks!
Do you send checks or do you submit your biweekly payments online? Could we see a monthly mortgage update along side the amortization schedule to see how it lines up?
I have several update videos posted after this one! And yes I just have it set up online for biweekly.
Y’all really do have a great interest rate. 😳 I didn’t realize that you have to refinance to get rid of PMI. 🤔 I feel like I should’ve known that. Hmm. I wonder what interest rates will be when I get to the point of wanting to get rid of mine. Our house is at 4.25% fixed
What is PMI?
It’s private mortgage insurance. I’ll do a video about it soon!!
It depends on the type of loan you have. For fha which we have you have to refinance. For conventional loans once you hit 20% paid/equity you can get it dropped with a new appraisal.
4.25 is not bad at all!
Actually my PMI on a rental property just fell off and I didn't refinance. I'm supposed to do a video about it...but yeah, pretty much called my lender to find out the process to get it off and they were like, uh...it's been off for 5 months now...LoL
You don't have to refi to get rid of PMI. Just call your servicer and ask them for their procedure to have it removed it you think you have 20% equity. PMI cannot be removed from an FHA mortgage though unless you refi.
Question! Do you have to specify when you pay extra that you want it to go to principal or does it automatically go towards principal if you pay extra monthly?
It depends on how your mortgage servicer does it! Contact them and find out what they require.
@MarisaFlores, I too bank with Freedom Mortgage, and IT’S A MUST to specify with those jokers. Two years in a row, I dropped $12,000 in principal. I even notified them prior to the money being deposited, and they STILL screwed it up! They made two regular monthly payments then the rest went to principal. I was so pissed 😤 they fixed it, but it took action on my part to get them to go through with it. Luckily I logged-in to review both transactions and noticed the “error” on their part. That would’ve been $2800 (per transaction) towards interest they would have stolen from me if I hadn’t been so vigilant. My suggestion to you is to write a personal check with the words “principal only” noted in the note section of the check, or ensure you have an icon or link to click that lets you pay strictly principal on their payment webpage. Call to verify payment instructions, and lastly, view your payment transaction history a couple days later to ensure they got it right. 🧐🤥😲👌🤦🏼♀️🤷🏼♀️
@@serjiogonzales1954 I work in mortgage servicing & see this frequently. It may be a machine that's processing all the payments that come in the mail & it won't always catch the words on the memo line, or that checkmark in the box on your payment coupon. The lender may also have a payment hierarchy system & unless you notify the lender how you want your payment applied, the hierarchy takes over. Calling ahead to let them know how you want the funds to be applied won't always work because it's most likely just a note they put in your account that no one sees until after the payment applies & you have to call in to remind them. Best thing to do is call to make the payment over the phone with an agent & keep your eyes on your account by the statement or the online system. The bank I work for has a hierarchy of having to have the monthly payment satisfied 1st before any additional funds are applied to principal. But also keep in mind that mortgages usually only calculate the interest on the 1st of the month based on that unpaid principal balance, so doesn't matter what day of the month you send in or make that additional principal payment, you won't pay any more or less interest.
@@serjiogonzales1954 My mortgage servicing company did the same thing . I paid $ 2000 extra, and they applied the money to next month payment and only $ 600 to principal. I just got heloc from the credit union and paid off the whole mortgage. My heloc payments are $ 230 lower than my mortgage and they are going down every month, plus I don't have to pay any escrow account.
Great work!!!
great stuff! how much was your house in total? And how much did you put down? Great content especially for new/young families.
Thanks! I cover all of that in this video: Our House Price & Mortgage Details ruclips.net/video/Cf5HU3Uh_Ag/видео.html
To make an extra payment to the principal do I need to specify it on my account? Or it is divide it automaticly?. Thank you for your video I love the easy way you presented numbers..
It depends on your lender. Check with them first! Every one is different so I can’t advise.
This is really interesting. Mortgages over this side of the world are totally different to the mighty USA.
So you keep that interest rate for the entire duration of the mortgage(up to 30 years)? Dang, best we get is 5 Year Terms. Then ofc you have interest rate exposure too. Jealous - probably the only time anybody would ever be jealous of 'debt' haha.
Yep! We have variable/term loansin the USA too but I got a 30 year fixed and I believe that is most common. So our rate is fixed for length of loan.
@@PenniesNotPerfection Crazy to me haha. We had a bank try 10 Year but the authorities shut them down. Govt has gotta eat when it comes time for a rate hike.
Very helpful. But when you live in California you can't purchase a home under 200k. Our loan was $399 when we purchased in 2008 and we plan on paying it off in 18 years.
Oh wow! Definitely true. There aren't many homes here under $200k in neighborhoods I'd live in now. Even our home is valued over $200k now. Our next home will likely be in the $400k range so I'll have to redo this video then!
I see you have freedom mortgage as your lender. I’m about to refinance from 3.625 to 2.75 or lower. One of the banks fighting for my business is freedom mortgage. How are they?? Typically I don’t really care who gets my money but from just random searches from the internet, there seems to be a lot of complaints from this company.
They actually have been really good for us. We didn’t select them, our mortgage was sold to them, but zero complaints from my experience. Not sure what the complaints were for them as we may not have had the same issues. I wouldn’t necessarily recommend them but I have not had any problems at all.
If your home value is increased then talk to your bank about removing the pmi. Your home value is over 20% paid now and your history of paying extra shows good faith. They can remove it at 18% just keep the payment the same since you don't miss it
We haven’t had pmi for several years but great reminder for anyone new that might find your comment!
I had 18% down and they gave me pmi stretched over 10yrs. Beware. I paid that the first year and pushed that removal. I just couldn't hold off longer.
Wells Fargo has a credit card that pays rewards every month to the principal of your mortgage
Do they?? I have to be honest, I personally HATE Wells Fargo and dislike having my mortgage with them. But I will look into this because I love the concept!
How many extra payments can you make each year? I remember a few years ago, mortgage companies only allowed one extra payment a year.
Depends on the company! You have to check with whoever holds your mortgage. I’ve luckily never had an issue making as many as I wanted.
We have almost exactly the same mortgage balance left as you (after 5 years) just renewed on a 5 year fixed...just called and set it up to round up today actually! We only round up from a biweekly payment of $403 to $420 cause we can’t squeeze more out, but what was weird and not expected to me was that to set it up we had to call in (only lump sum payments were available online) and now they said we are set up where we HAVE TO PAY $420 each time, and we are able to cancel it if needed....but only until next April rolls around and for some reason once a year has passed we are now like, locked in to paying $420?....my fiancé made the call so of course he didn’t ask “WHY” anyone know why?...like we want to pay it so whatever but....if you sign a contract that says minimum payment due is one thing, how can they just make you pay more?
That is weird! It’s strange that mortgage companies can service their loans however they want and do stuff like that.
That’s amazing you are on a 5 year loan!
A Merry Life, On A Budget no no no not a 5 year mortgage a 5 year fixed term...as in the interest rate is locked in for 5 years, we have 17 years left on a 25 year...I hope after this next 5 year term we can get 10 years or under but paying off the mortgage isn’t our priority right now
Oh that makes more sense! I read right over the fixed term part of your comment LOL! That's smart! I don't think paying off our mortgage will be a priority any time soon either but I'm happy with our progress and the small ways we've set up to pay it off faster without any extra effort.
Do you have to tell your mortgage company to apply your extra payments to the principle or do they apply it automatically? Btw TFS! Hopefully i will be buying soon.
It depends on the company honestly. I did not, it was automatically applied beyond the payment due.
Thank you so much
Make sure the mortgage company applies the extra $35.00 to principal payment only not the actual loan just principal.
They do. 😉 Good to always check when you are paying, every company is different.
Can anyone convert a monthly mortgage payment to bi-weekly with the current bank, or do you need to go through another service? Very informative video. Thank you👍🏽
gr8ride411 you have to check with your lender. Most allow it but some don’t.
Can someone assist. Is it better to roll the taxes in the mortgage payment or pay separately to help pay off the loan amount sooner?
The taxes don't affect how quickly you pay off your loan. The amount for your taxes in your payment goes to an escrow account. This account builds up throughout the year and then the mortgage company pays your tax bill. You can do it yourself if you are able based on the type of loan you get. But how you pay your taxes has zero to do with paying off your loan faster or not.
so biweekly pays off more interest than just paying a little extra once a month? please clarify thanks!
I'm so new I just got my new home still learning but having difficult of my mortgage going up every year they say is because of my shortage escrow Do you have any tips that you can help a little?
It depends on what is increasing it to cause the shortage. Property taxes? Can’t do much about that just save more through the year with the anticipation will go up. Insurance? Shop around and find a better deal. You don’t have to keep the same house insurance even if paid through escrow.
I’m at 5.2 % so I’m doing a lot to pay extra , I also do the bi-weekly . I do 150 dollars a month extra , also and I’m saving to do a recast i have to pay 22,000 within 6 months let them know and my payment will drop 300 dollars 💵
Recast is a great option & you can do it more than once. If you can afford the higher payment you already had, stick with it & the extra goes to principal! If you recast & only pay the minimum each month, you wind up paying more in interest in the long run, so no point.
I disagree with throwing money away because the interest is taxable. Rent is in some states but its not anywhere as close to as big of a write off as owning a home.
🤷🏻♀️
Do you put your sinking funds on your high yield saving account?
I do! Yes! It’s money that will be spent but it might as well earn interest until it’s ready to be used.
So my question is on the by weekly payment. Is that the full Morgan. Payment every 2 weeks, it is that 1/2 the more. Payment every 2 weeks?
Every two weeks we make a full mortgage payment. The $600 paid every two weeks makes up one full mortgage payment per month. But because there are 52 weeks in a year you make more of those $600 payments then needed which is is why 1 goes to principal. Does that make sense? It’s just an easy way to pay more yearly.
This month just happened to be the one extra payment of the whole year that goes to principal.
@@PenniesNotPerfection ok. So your paying 1/2 the mortgage payment every 2 weeks, which gives you the full payment for the month, and the 1 extra payment for the year as there are 2 months that you would pay an extra 1/2 payment. Is that correct?
@@debraschroyer1878 Yep! Sorry for not explaining it clearly, I realized that when I was filming the reason why I thought it was in December is because we do have one "half payment" fully applied to princiapl in December, so this was the other one which makes up 1 FULL payment per year toward extra principal. Hopefully that makes more sense!
I am curious about where you are located? Which state and is it a suburb, city, or country living? Thank you! It is so much more expensive we’re I live.
City. Tennessee. A lot of houses near me are more expensive too. We chose a starter home for that reason. :)
Apply as much as you can the first few years!!! If you can handle a larger payment, then just pay the extra on your first few months.
Banks won't tell you that. They want the interest.
Definitely!
Questions do i need to pay the escrow balance? I have escrow balance i got confused if i need that or no need?
Escrow is the money the mortgage company holds from you to pay your homeowners insurance and taxes. You would need to talk to your mortgage company for specific details.0
Can you make a year later video update
Did you call them to set up the biweekly payments? Or do you do it manually each payment?
I set it up on our mortgage company’s website. It was very easy for us but every company is different! You have to check with whoever has your mortgage and see what they offer. If they don’t allow biweekly payments you can save up and make one full principal payment a year to get the same results.
Looks like we have the same company :) I’ll try this next month
Woo! They make it really easy. You may have to play around with the due dates and stuff when your first set it up to fit your budgeting paydays but other than that it’s been great for us.