Deals.Woot

Mortgage Hint #1: By paying 105% of your mortgage payment (Principal + Interest but not including your escrow) you will take one year off your 15 yr, 4.5% mortgage.

Can you find that extra 5% to be free from a mortgage one year earlier?

I just recently (November) purchased my first home, and locked in at 4.75% for a 30-year FHA with a measly 3% down.

Figured I'd use the money I would have otherwise put down to get settled in the house and make it "my own." That being said, I am pre-paying. Every month I "round up." Not only is it easier to balance my checkbook that way (stupid pennies...), but I'm essentially making 1 additional payment every year, spread over my 12 payments. I was told that typically takes 8 years off a 30-year mortgage, but I've never done the math myself.

Where did you find those nifty figures, @patentdude?

@perkalicious11: I created a little spreadsheet in Excel to help calculate some of that stuff. Here's the link if you'd like to play around with it. https://docs.google.com/fileview?id=0B17sNmG_QBYcOThhYzExMTQtZWRlZi00ZTZjLWE1MWQtMjE2M2JmZDU0MmMz&hl=en

@shrdlu: I'm serially bad at voting for questions. I click to read it and see if it's interesting, but by the time I've composed my stream-of-consciousness comment my attention span has been depleted.

Just voted. Sorry @patentdude for not getting on that sooner.

Interesting information, but I'm still waiting for the punch line -- a spam link to one of those refinance-my-house or obama-says-refinance or one-stupid-trick-to-lose-weight-and-refinance sites. In fact, the only reason I clicked on the thread was to hit the "tattle" button, because I was dead certain it would turn out to be spam.

Imagine my surprise when I found actual useful information! Especially since my mom and I are going in on a house, closing on Monday. I don't know whether to laugh or cry.

@robertb: I almost thought about suggesting a title change for this, since it does look kind of spammy, and it is useful. It's up to the OP, though, to request this.

@patentdude: What say you? Perhaps a quick Tattle, and a change of title to something like "Useful information about low mortgage rates: From Deals to the Community"???

@perkalicious11: I just refinance my mortgage down to a 15 year @ 4.5%. I'm also a Dave Ramsey listener so I'm all about getting rid of debt and being able to live like "no one else" when debt free. After all, debt is normal and I'm all about being weird.

I'm fine with changing the subject line to what ever everyone would prefer, but I just thought I had to phrase it as a question to not "get in trouble." :)

@andycool22: If you're doubling up your mortgage payment, you should be paid off in much less than half the time -- it's the whole "compound interest" thing. Especially if you're doubling the total payment, including escrow!

How about, oh.... I don't know... paying the minimum? Your mortgage at today's rates are the best loan a private consumer will ever get. The interest is tax deductible too. What a disciplined citizen should do is take as large of a mortgage as possible. Take the money saved by paying the minimum (and any down payment you may have avoided paying) and invest it in something that yields higher than your mortgage rate.

I don't think I'll ever pay off my mortgage.

@sethb: Short term, any "investment" is gambling. That's why you don't worry about the short term. Long term, even if you bought stocks at the pre-boom peak, you'll come out ahead if you hold on long enough. Unless you really do think the US economy is going to collapse like Zimbabwe or Greece, in which case your biggest investment would be in ammunition and canned food, anyway.

@sethb: a dollar-cost-averaged stock index fund. We're talking about a 30 year time frame, not 1 year.

edit: but, yes, paying down your mortgage is a very safe investment.

Closed on my first home in March with a 30 year, 4.75% with negative 1.5 points included.
Not a bad deal + $8000 tax credit.

What a time to be purchasing a home.