Mortgage Update:
I made my 12th mortgage payment today... Yup, I've had my place for a full year!!!! It's crazy to think this place has been mine for a whole year... time sure seems to be flying by. Anywho, its mortgage update time.
I paid my mortgage and tacked on an extra $103.35 this month so my new balance is $115,442.32 (my goal is to get it under $115,000.00 by the end of 2010.)
If I pay the minimum balance from here on out, I'll pay off my mortgage in April of 2039. To date, i've saved $8,696.74 in interest and $3,210.93 in principle by paying a total of $709.28 in additional principle payments over the life of my loan.
Total Condo Costs:
Money paid to aquire the property and get keys: $7,057.08
Money Spent to Remodel and Repair Property: $17,672.29
Total: $24,729.37
First Time Home buyers Credit: $8,000.00
Current equity: $4,557.68(not including any change in value the upgrades gave me)
Electrician costs -$95.00
TILE Refund $1,265.00
Current amount in the hole: $11,001.69
Please explain how you can reduce principle owed by $3200 when you haven't made $800 in extra payments? As I understand it, extra payments save $ on interest since the amount used to calculate said interest is less, but the amount you agreed to borrow never changes. Please explain.
ReplyDelete@ Anon-
ReplyDeleteBased on the payment schedule I have from when I closed, i'd still have to make $3,200 in principle payments, plus the $8,696.74 in interest when my condo will be paid off because of the extra amount i've added to my mortgage. Technically its $3200 of more interest.
Right now, when I make my last payment of 629.53 in April 2039, i'll have paid 107707.49 in interest over the life of the loan.
If i look at the pay chart on the original mortgage amoritization, in April 2039 I'd still have 3200 in principle left to pay down, and I would have paid 116361.97 in interest to date. The final interest from the remaining 5 payments makes the total interest on the loan $116,404.23
So in terms of the post, I won't have to make 5 payments on my mortage, essentially saving me those future principle payments.
Hope that makes since.
But its basically interest...
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