Pleasanton, CA · Member since 2016 · 11 posts · 1 vote
Hi! Does anyone have any tips on how to go about making extra payments to mortgage principal? I'm a contractor right now so my salary is constantly changing, but as soon as I get paid, I'd like to make some small extra payments towards principal .. any help is much appreciated!! Thank you!!
@Aaron HowellSeems like a good thing to do when I can afford it, right?
Why would you want to pay a 2046 expense with 2016 money? You will be much better off keeping that extra money available in a liquid investment. If you don't have a contract next year the mortgage company will still want regular payments and won't care that you made the payments for 2046 early. You could lose your house doing this. Better to have the cash to pay bills AS THEY COME DUE!
Denver, CO · Member since 2012 · 268 posts · 162 votes
10y
My theory is, with money so cheap, just put it all in a "pay off my mortgage" savings account. When that account hits your balance remaining, you can decide whether to pay it off... or not. That leaves all the control and safety in YOUR hands.
I love paid off properties and wish you the best in making this happen!!
Honolulu, HI · Member since 2016 · 11 posts · 0 votes
9y
@Erin Monday, It all comes down to what your personal priorities are. Some people want liquidity and leverage, others hate paying interest and don't want debt on the books. If you're more concerned about what you can accomplish now, then deploying your money today is an effective strategy. If you place a higher value on the equity in that home (you intend to keep it indefinitely and want the stability it will bring to your life) then pay down the mortgage. Dollars are not intrinsically better than equity--to say so is an opinion. There is sometimes an unspoken implication in these forums that we all have to get to millionaire status by age 35 or we're suckers. Investing happens in a thousand different ways, at different speeds, and with different levels of risk attached. Read, read, read, and then decide what your priorities are (i.e. owning this house free and clear ASAP, or boosting other investment vehicles ASAP). You will reap the benefits and/or consequences of your decision, so make the decision that suits your life goals.