Cathy

2008-08-05 17:24:00

If I make a lump sum payment of say $10,000.00 on my mortgage will that reduce the amount of interest I pay each month, making more of monthly payment go to principal? Thanks - - - EDITOR'S RESPONSE: In many cases, yes, but check with your lender, and read your loan paperwork carefully. Some loans are less hospitable to lump sum payments than others. And either way, you'll want to coordinate the application of your payment with your lender. I've seen cases where someone made a lump some payment, and a clerk at the lender's institution entered it as advance payment of the next three month's mortgage. This did them no good at all. It's important to A) review your paperwork to see whether lump sums will be applied 100% to principal and B) check the paperwork to see whether there is any early payoff penalty (yes, some loans actually carry a penalty for paying them off early), C) call your lender before you send the payment to make sure they understand what to do with it, and C) call your lender or check your account online after you send the payment to make sure that your principal was reduced by the appropriate amount. It sounds like a lot, but it won't take more than a couple of hours when all is said and done, and it's worth it :-)

Barbara Jones-Calculator

2008-07-19 19:51:00

Hi, Is there a calculator that will show me how long it will take if I make extra principal payments? - - - - EDITOR'S COMMENTS: We have an "Additional Payments Calculator" that can help you, but you'd have to play around with it for awhile to get the information you're looking for, because it approaches the question like this: "To pay off my mortgage by a given early payoff date, how much extra do I need to pay each month?" We've had a number of people indicate that they want to approach this from the angle: "If I pay $X extra every month, how much sooner will I repay the loan." In response, we will begin development of this type of calculator. In the meantime, use the Additional Payments Calculalator, adjusting the payoff date until the dollars per month mirrors the amount you are interested in paying extra each month.

TM

2008-07-01 17:35:00

Used the calculator to look at student loans and early pay off. Interest is not tax deductable due to income level. Thanks for the calc.

Mark

2008-06-13 08:34:00

Over the years people always talked about making one extra principal payment a year and you can pay your mortgage off in half the time. I just used your calculator and it states that I need to make extra payments of 1/3 of the payment amount every month to payoff the loan early, what gives? - - - - EDITOR'S COMMENTS: It depends on our interest rate, of course. At 7% annual interest on a 30-year fixed rate mortgage, if you, from day one, increase every payment by 35%, you'll pay off your loan in 15 years, curring the repayment period in half. If you had a high-interest rate loan, like we were seeing in the 1980s, so you had a 30-year fixed rate at 12% Interest rate, you would only have to increase each payment by 17% to pay it off in half the time. The higher your interest rate, the greater the affect of making extra payments. Make sense? But if you're only making one extra payment a year (as you would with a typical bi-weekly repayment plan, you're only paying 8 1/3% more per year. This goes a long way toward increasing the rate at which you repay your principal and build equity, but it won't, unfortunately, cut your repayment term in half, unless you're talking about amazingly high interest rates on long-term loans, such as a 16% or 17% interest rate on a 30-year loan, which is not likely to be something any of us would ever consider.

Mary Jackson

2008-04-17 12:02:00

This calculator is awesome. When I saw how easy it is to pay a little extra a month and how much sooner you can pay it off, I was elated. I owe 8 more years but after using your calculator and determining how much I could afford to pay extra per month, I should wipe it out in just two more. I am going to save quite a bit of money, not to mention getting rid of the debt 5 1/2 years early. Thanks for the calculator!

bill

2008-04-14 13:29:00

Just checking - - - - EDITOR'S COMMENT: Anytime, Dude!

Doug P

2008-02-14 08:23:00

Question. My original loan term is 30 mos. I wanted to find out how much I need to pay extra to turn it into a 10 year term. I"ve made 40 payments. Does the extra payment mean if I start paying the extra payment today it will be paid off in ten years or does it mean ten years from the start of the loan? EDITOR'S REPLY: Excellent question! On this calculator, "Loan Term" refers to the original loan term, and "New Loan Term" refers to the number of years between today and when you want to pay off the loan. "New Loan Term" is not measured from the start of the loan on this calculator.

Pam

2008-02-11 08:07:00

There is still no calculator here. EDITOR'S REPLY: This feature requires the Flash plugin to give it the functionality that makes it such a useful tool. Flash is a common plugin, and is widely used. Once you install it, you can use the calculator. It will come in handy for many other sites, too. Go to http://www.adobe.com/ and click on "Get Adobe Flash Player". Adobe is the same company that brings you "PDF" documents (Adobe Acrobat), Photoshop, and other widely used products. Adobe creates a product you can trust.

chris

2007-12-03 08:35:00

I have a home equity loan at 7.65 bal 16.200 and a fixed at 8.64 bal 42.792. What would be the best way to paid it off early? - - - - EDITOR'S COMMENT: Good question, Chris. Of course, there are more factors involved in making this decision than you have shared with us. Here are some ideas to help you know where to start. Check the terms of both loans and see if either has a prepayment penalty, and to see how extra payments are applied for each loan. Some loans make it easy to make extra payments and apply them straight to the principal, but other loans are not favorable to additional payments. Also consider the age of the loan. Most of the interest on a loan is paid in the first half of the loan term. If the larger (original) loan is many years older than the home equity loan, most if its interest may have been paid already, and a much higher percent of your home equity loan payment may be applied to interest each month. So, the total amount of remaining interest is obviously a factor (the Amortization Calculator on this site helps provide insight into this). However, this factor only applies fully if you plan on keeping the home. If you are going to sell it in five years, only consider the interest you will be saving between now and then. As you see, there are many things to consider. Once you've done your research, run both scenarios (prepaying either loan as quickly the extra payments you are prepared to make will allow) and see which one saves you the most in interest. Also, make sure the return on investment to these extra payments is greater than it would be if you were to pay off other types of debt you may owe, such as auto loans or credit cards. If so, you might do that instead (unless your are currently in a negative equity situation, in which, making extra mortgage payments would be an even better idea).

Trayce

2007-11-04 18:11:00

This actually is the greatest thing since sliced bread!!!

Great Mortgage Resource

2007-10-30 18:12:00

I use your calculators on my website to help visitors calculate their mortgage financing and refinancing savings. Thank you for a great resource. Terry Lamb

bill

2007-10-16 19:20:00

hey this is cool!!!

Marcus

2007-08-17 12:31:00

Great for plannig my retirement.Calculating rental property payment to meet retirement date,thanks!

Fat Kid

2007-08-04 14:37:00

With all the money I will be saving....I can eat more!!!!

jeremiah

2007-07-18 15:55:00

Very nice. I was able to coordinate the amount necessary to pay off a mid-term debt and roll this cash flow into my home loan at the appropriate number of months to nail a figure that fits nicely into my monthly budget. This is very very useful.

robert winter

2007-06-21 12:43:00

If you take the extra money you would spend on paying down your mortgage faster and instead invest it at above your interest rate you WILL over your term of loan make more money investing then if you paid down your loan faster.

AUBREY

2007-06-16 20:07:00

THIS IS GREAT!!! I SAVED THIS ONE IN MY FAVES! IT WILL HELP A LOT...THANKS!!!

Louis Maglie

2007-05-29 14:21:00

Loved the program!! When I saw my current payment right to the penny, I said, WOW !! Thanks for assisting in planning my future projections.

Sheila

2007-04-25 07:19:00

payoff

LANCE LARSON

2007-04-23 17:15:00

Please calculate how fast I can pay my home loan. - - - Perhaps a "Making Extra Payments" calculator.

Marlin O. Trulsen

2007-04-22 14:16:00

There is no calculator here. - - - - - EDITOR'S REPLY: Sorry about that, Marlin. This feature requires the Flash plugin. Once you install the missing plugin, you can use the calculator. Flash is a common plugin, and is widely used. Please accept our apologies for any inconvenience. - C4M Admin. -