May 24, 2009
Michelle, Great way of thinking…. I suggest YES, figure out a comfortable payment (maybe check what the payment was back when you signed up) and ask your lender (bank) to “hold the payment” at that comfort zone. HEADS UP THOUGH…. I just called my bank to do the same, and they will ONLY let me increase my payments by 15% … ( I hate limitations ) Here's an Example….I set up my mortgage back in 2006, and my Bi weekly payment was $920… NOW its all the way down to $621, I am only allowed to SET my payments as high as $714 (15% increase)…… BUT….. How can we out smart this and keep ourselves disciplined ….??? Here’s what I did. Most banks NOW allow us to put “lump sums” down whenever we like ($100 minimum)… unlike the previous mortgages that are “on anniversary dates ONLY”. So… my goal is to put $900 biweekly into my mortgage that will only allow a payment of $714…. I open up a NO FEE bank account that will be for the MORTGAGE ONLY and set up a “pre-authorized” transfer of $900 bi weekly from my regular account. I then set it up that the mortgage payments of $714 ( still 15% higher then the minimum) will come out of that new MORTGAGE ONLY account. WOW….. instead of just letting the $186 get spent unnoticed, now I will have a bank account accumulating $186 Bi weekly, which means…. I will be paying $7254 per year in EXTRA principle, …. Thats’s $36,270 over the 5 year term !!!……EXTRA ! The people that will laugh last will be the people that look back at these low interest rate years and know they paid off the most amount of debt possible.
Michael Mullis AMP