Have you refinanced lately?

[bobr1952]

Very true. A lot of people don't think about this. Just making extra payments to principal each month with your 30 year loan can turn it into a 20 year loan pretty easily! A good alternative for people who can't handle big upfront refinancing costs or don't want to add years to their loan.

Some do not have a goal of paying off their mortgage--myself included--so advance payments are not for everyone--but certainly a strategy to consider. I am perfectly content paying the monthly payment--different financial circumstances dictate different strategies.

 

[mscriv]

^^ You bring up a good point due to the fact that the vast majority of home owners do not stay in their home for the duration of the mortgage. However, the point in making extra principle payments is that the money comes back to you when you do sell the home because your loan was paid down that much more.

 

[bobr1952]

^^Of course, but in my case, I need the money--so the refinance for me will net more more monthly income--and since my income (which is a military pension) is taxable, I can always use the tax break.

 

[mscriv]

I'm with you there friend. Our whole goal in refinancing is to ultimately free up cash flow.

 

[RaceTripper]

When my income goes up, such that I have extra, I am more inclined to add to my retirement/investment accounts than I am to make extra principal payments. That may or may not be a optimal strategy depending on ROI.

 

[bobr1952]

I think as many have said here--it only has to be right for YOUR strategy since there is no absolute right way to manage your finances.

 

[Gregg2]

Yes, I meant principal payments. Still, refi is better for many who just don't have the discipline to stick to extra payments, auto transfer or not. It's not for everyone. I have the discipline to make extra principal payments, but I like the convenience of just having the appropriate mortage terms for me. It's never an issue.

Yes, you said so in your post. I didn't quote the whole thing, so . . .

I think the auto transfer may teach discipline to someone in need of the instruction. Money in the pocket is easy to spend.

But then, I am a very disciplined person. People comment on it from time to time. So take my advice, or leave it, with that in mind. (just a general comment, not directed to a particular post here)