Refinance Your Primary Mortgage

Refinancing your mortgage will typically be the best option, as it can save you hundreds of dollars per month if you’re refinancing from a high interest rate to a lower rate. Let’s look at an example, lets figure that I took out a $250,000 mortgage loan 5 years ago with an interest rate of 7.25%. At this loan amount and this interest rate, my monthly payment will have been approximately $1,705.00 per month. As of the time of this post, I’ve seen interest rates for 30 year mortgages as low as 5.75% - the interest rate will depend on your lender, your credit score, payment history, etc. so you’ll have to talk to a mortgage broker prior to getting a firm rate quote, but for the interest of our example, we’re going to figure that we can get a loan at a rate of 5.75%. For simplicity sake, lets compare a $250,000 loan at 5.75%. At this interest rate, our monthly mortgage payment will be approximately $1,459.00. This is a savings of $259 per month. A couple things to remember are that:

1. In this example, we figured that we’ve had our original loan for 5 years. If that were the case, we wouldn’t still need a $250,000 loan, we’d actually only need a loan for about $235,950 (let’s figure $236,000 for simplicity). Plugging that amount into a payment calculator will yield a monthly payment of $1,377.00 per month, yeilding a savings of $358 per month.
2. You’ll have to take into account loan processing fees. Typically you’ll be paying processing fees, points, etc. which could end up being a couple thousand dollars. When I refinanced, I wrote a check for all of these fees ($2,900 in my case), however I believe that you can have these fees rolled into the cost of your new payment.

Depending on your situation, your current mortgage interest rate verse current market interest rates, closing costs and actual savings, it is always best to consult a trusted professional to see if refinancing would be a good choice for you and your situation, however as you can see from the above example, refinancing offers a great way to decrease you monthly payment.

Reassess Your Property Taxes

This option will not necessarily save you as much money, but nonetheless can definitely be a money saving option. If you bought your house in the last 3-6 years, chances are that you paid more for you house than it is worth now… especially if you live in California. Let’s take a homeowner in California for this example, and lets figure, for simplicity, that this homeowner bought a home 5 years ago for $500,000 and property taxes are currently 1%. This will mean annual property taxes of $5,000 per year, or about $417 per month. Lets now figure that this home is now only worth $350,000. If this home were purchased at this amount, property taxes would be only $3,500 per year or $292 per month. Should the homeowner get their property taxes re-assessed and adjusted, they’d be saving approximately $125 per month.

So how do you go about getting your property taxes adjusted? There are many private companies out there that assess property values and adjust your home value with the county assessors office to lower your monthly/annual property tax payments.

Again, I recommend consulting a trusted professional before trying to have your property taxes adjusted because in some cases, property values will have increased, resulting in higher property taxes, in these cases, it obviously would make more sense to keep the current property tax and assessed home value in place.

If you are one of the unfortunate people who has lost their home in one of these fires, here are a few things to keep in mind. If you haven’t lost your home, but you have, or will be signing up for fire insurance, you should keep these things in mind as well.

1. Be prepared with copies of documents, purchase receipts, etc. to help prove ownership. Photos & video evidence of home contents is also very helpful.
2. Try to be cooperative with your insurance agent - it may be hard if you have lost your home, but try to keep a level head and work with the agent, as they are just trying to do their job.
3. Review and assess the damages, and settle on an amount. This will sometimes require the help of a 3rd party and/or a lawyer.

What does fire insurance cover?

1. Structure - your home.
2. Other structures - this includes any other structures on your property, detached garage, pool, etc.
3. Personal property - your possessions and the contents of your home.
4. Temporary expenses - to help cover your temporary living expenses, etc.

Be sure to review your contract, as fire insurance policies will be different in many different scenarios.

Flickr Image: Uploaded on November 16, 2008 by Erik.Nielsen.Photos

When is a 2nd mortgage right for you?

There could be any number of reasons why a person would consider taking out a second mortgage. If you have a large amount of other high interest debt, such as credit card debt, it may make sense to take out a second home mortgage to payoff this debt. You may want to use the second mortgage to make an investment, whether it be in the stock market or a vacation property. You may just want to live above your means and buy a boat. The use of the second mortgage will in the end, be up to you. When I bought my first condo, I took out a second mortgage loan in order to avoid paying PMI (private mortgage insurance).

Interest Rates for Second Mortgages

As mentioned above, the interest rate on a second mortgage will typically be higher than the interest rate of a primary loan due to the fact that a default, the first loan is paid of prior to the 2nd. The interest rate will also be determined by the amount of the loan - the larger the percentage of home equity that you are borrowing against, the higher you can expect the interest rate to be.

Before applying for a second mortgage, make sure you talk to your broker and understand all of the details of the loan. Remember that no matter what the amount of the 2nd mortgage is, even if it is only a fraction of your primary mortgage, if you default on the 2nd mortgage, you could lose your home. Be sure to do your research and have a solid knowledge of your budget prior to securing a second mortgage.

Firstly, my wife and I decided to have custom closets installed in our master bedroom, and in doing so, I had to bypass an additional principal payment. This is a decision that we are still happy with because not only were we in need of some organization in our master bedroom closet, but it also will help to increase the value of our home when it comes time to sell.

Secondly, with the declining market, we do not have the same amount of extra cash lying around that we can use to make an additional principal payment. Over the past 3 months, my portfolio value has decreased by half. Thankfully, I’m only 30 years old, so I haven’t pulled any money out of the stock market, and in fact, I’ve recently started to put more money into the stock market, and will probably continue to do this as long as the Dow Jones remains below 10,000 points. If Warren Buffet is doing it, it can’t be a bad idea, right?

With the market the way it is now, I am left with the following question: Should I now put more money into the stock market, or should I return to making additional principal payments? This is a tough question, because the market still seems to be very volatile, even though this past week was mostly in the green, but making additional principal payments guarantees me savings on mortgage interest.

For the remainder of this year, I am going to bypass any additional mortgage acceleration payments and leave a majority of my extra money in high yield savings and money market accounts. If I see a good opportunity in the stock market, I may invest in some high dividend yielding stocks, but for the most part, I am just going to sit on as much cash as I can.

5 Simple Tips to Save Money on Energy

1. Minimize the electricity usage - grab a book! As days in the winter are shorter than days in the summer, we tend to spend more time inside. During this time, make sure that lights are only turned on in rooms that people are in, and rather than turning on the TV, or browsing the internet, grab a book.
2. Run ceiling fans in reverse. If you have a ceiling fan, look for a switch on the base of it and select the reverse option. Running ceiling fans in reverse will help circulate the warmer air that gathers at ceiling level back down toward your living space.
3. Don’t turn that heater on! Look for other ways to stay warm while inside, if you have a fireplace, start a fire. If you don’t have a fireplace, grab a blanket and cozy up on the couch, or grab a sweater.
4. Stop any cool air drafts. If your windows and doors aren’t properly sealed, you can be wasting tons of energy on cooling costs, as your heater pumps away, it is being directly offset by cool air leaking in from underneath doors and around poorly sealed windows. Place weather stripping or rolled up towels at the base of doors, and make sure all windows are properly caulked and sealed.
5. Turn down your water heater. Many water heaters are set to about 140 F by installers, try lowering this 10 degrees, if you don’t notice a difference, try lowering it 10 more. Dropping your water heater from 140 down to 120 can help save 5-10% on heating costs.

5 Timely/Costly Tips to Save Money on Energy

1. Install Energy Star appliances. Though costly up front, Energy Star appliances can save you from 10-20% on your energy costs.
2. Install storm doors and dual pane windows. Storm doors are thickly insulated and help keep cool air out and warm air in, likewise, dual pane windows will do the same thing.
3. Install a programmable thermostat. By installing a programmable thermostat, you can guarantee yourself that you won’t forget to turn the heater off. You can set it to 60 degrees from 8am to 6pm (while you’re at work). That way, you have a little piece of mind that you didn’t leave the heater on while you’re at the office.
4. Re-insulate, and/or add additional insulation in walls and attic. If you’ve done all of the above and your house still doesn’t seem to hold heat, then your house may be improperly insulated. Installing new insulation in the walls and attic can help your house retain heat and save you money on heating costs.
5. Seal your air ducts. Make sure that all of the ducts that deliver air from your furnace are properly sealed. Any air escaping the ducts will be lost, thus increasing your energy costs.

1. Are current rates lower than your existing mortgage rate?

This should be a no-brainer, but you’d be surprised how many people actually refinance just to pull some extra equity out of their homes. Another thing that should be considered when looking at the new rate is whether the amount you have to pay in closing costs will offset the savings that your new, lower rate will get you. If your closing costs are too high, it may be best to just keep your existing mortgage.

2. Where does the break-even point turn into savings?

As mentioned above, the closing cost will many times eat into your savings, but if you’re able to lower the rate enough, how long will it take to recoup the closing cost? If the closing cost will be recouped by savings in less than a year, refinancing is probably a good option, however if it will take you 3-5 years or longer to recoup your closing costs with mortgage savings, you should probably consider a few things:

• How long do you plan to stay in your home?
• Are there other lenders who will offer better incentives?

3. Shop around prior to selecting a refinancing option.

There isn’t just one lender out there. Make sure you shop around and have a good idea of current rates prior to selecting your refinancing option. You wouldn’t go buy a car without doing your research first, would you? In most cases, no… you’ll want to first know what other people are paying for that car, and what financing options and incentives are available.

4. Get a rate lock

This will give you time to shop around while knowing that you have a specified rate in mind. Don’t let this be verbal, get a rate lock in writing. This will specify the length of time that you have to secure the loan at a specified rate, as well as other information about the loan.

5. Get a good faith estimate

Typically, lenders will provide you with a good faith estimate after you have filled out your loan application paperwork. Good faith estimates disclose all costs and fees, and these will allow you to compare the loan to your current loan, and other potential loans.

View LifeHackers Top 10 Real Estate Search Tools.

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Luckily, for those of you who are still in your homes, many lenders have started, or will be starting homeownership retention programs that aim for ways to keep current owners in their current residence. For example, a quick Google search for “homeownership retention program” will bring you to the Countrywide Financial website:

Bank of America Announces Nationwide Homeownership Retention Program for Countrywide Customers. Program will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide Financial Corporation customers nationwide.

I’m absolutely furious about this. One, I am pissed off that these irresponsible borrowers are now getting bailed out and presented with options on how to keep their homes. As far as I’m concerned their asses should be thrown out to the streets. Two, I am pissed off that the government is offering the large banks and corporations a way out of all these crazy ass backwards mortgages and loans that these companies offered to sub-prime borrowers. As far as I’m concerned, these banks and companies should go fuck themselves, after all, it was their fault. Let’s be honest… can a family making just under $100K per year really afford an $800,000 house? NO, THEY CAN’T!!! In no way, shape or form could this ever work. EVER!!! Bankers and lenders are absolute idiots for not seeing this.

I’m pissed, I can’t believe this is happening, and now, all the responsible people out there are going to get stuck with the burden of paying for these idiots mistakes through higher taxes.

I live in a condo that I paid $290K for. About 2 years ago, I started getting some quotes for having custom closets put into our master bedroom. Most quotes came in at $5-$6,000. Though that was only about 2-2.5% of the cost of the house, I couldn’t justify it to myself to actually spend that much on our closets, so here I found myself 2 years later. I have a friend who just bought a franchise from a closet company, so I asked for a quote, then I asked for the quote with me providing the labor. To my surprise, the quote went down considerably, so I decided to just go ahead and pull the trigger. The conditions:

1. Demolition & Prep
   I do all the demolition and have the closet empty and ready to go at the time of installation. This was actually harder than I expected… not the demolition part… I love me some demo… the hard part was getting all of our clothes out. You would be amazed at how much stuff piles up inside your closet over the course of 5 years. Once the clothes were out, demo was quick and easy, then we put on a fresh coat of paint, a nuetral color so that the next owner of the house wouldn’t have to repaint over some hideous color.
2. Help With Installation
   I don’t mind getting my hands dirty and doing some wrenching, so this was just like an added bonus for me. You mean you’re going to charge me less than half AND I get to help??? No complaints here.

So the closets are done, I can already see the value of my home increasing. Good stuff. Anybody else out there have custom closets? Do you like them? Would you do it again if you had the chance?

This was a once in a lifetime opportunity in terms of cost, so I couldn’t turn it down. Over the past few years, my wife and I have a had various companies come out to give us quotes on custom closets - From California Closets to Closet World, all of the quotes that we got were somewhere in the $5,000-$6,000 range. And to be honest, I really couldn’t see spending that much… after all, we live in a condo. So out of the blue, I get an offer for the exact closet system we’ve been looking for, but at half the price! $2,500 for the whole job!!!

The closets get installed tomorrow, so i’ll post some updates and maybe some before and after pictures. Hopefully missing this extra principal payment will pay us back in added value in our house.

This post is just meant to detail and give some insight on the effect of making the additional principal payment last month, and how it effects this payment and all future payments toward my mortgage. My July 1st payment of principal and interest was $1,509.77. Of this amount, $1,248.60 went toward interest, and $261.17 went toward principal. I still have about 28 years left on my loan, so my payments toward interest will be quite high for a while longer, but without the additional principal payment, my next regular monthly mortgage payment would have been less favorable (though it is hard to become less favorable than 80% going toward interest). Here’s what the breakdown of my regular payment if I had not sent in the additional principal payment: $1,261.89 toward interest and $247.88 toward principal leaving me with a balance of $237,284, rather than my current mortgage balance of $234,770.

As I noted in previous articles, the amount of savings in interest expense in the short term really isn’t that great - only about $14 after 1 month, but over the life of the loan, it will really add up, and if I continue to make additional principal payments, it will add up even faster.

Stay tuned for an update on my next additional principal payment - I’m hoping to put earnings from this blog directly toward all of my additional principal payments.

Reverse mortgages give seniors who are no longer able to work or generate income a way to leverage the equity in their house to start receiving a monthly income once again. The payments received from the reverse mortgage can be used to pay medical bills, credit card debt, or any other expenses that may be necessary.

Qualifications & Requirements of a Reverse Mortgage

You must be 62 years or older, and the home that the reverse mortgage is being taken against must be your primary residence.

How much money can I get from a Reverse Mortgage?

The reverse mortgage amount will depend on your age, interest rate, and the value of your home. Typically, the more valuable your home is and the older you are, the more money you will be able to borrow with your reverse mortgage. A lower interest rate will also affect the amount of money that you can borrow.

How will I receive the money from a Reverse Mortgage?

You will generally have three different options when choosing to receive money from a reverse mortgage. All of the amounts will be determined by the above criteria.

1. Monthly payments
2. Lump sum
3. Line of credit

Prior to going to a lender, it’s often a good idea to do your own credit report so that if there are any bad marks on it, you’ll be aware of them, and you may even be able to start amending them prior to securing a home loan.

The difference in pre-qualification and pre-approval is that a lender can guesstimate the amount of the loan you’ll be able to recieve based on income, debt, etc. and no credit report is necessary with pre-qualification, and with pre-approval, the lender will have to take an in depth look at your credit report to determine exactly the amount that you will be able to secure in a loan.

I just read a great post Getting offers in a tough real estate market which gives hope, but even so, I’m still not sure that I’m ready to pull the trigger and actually try to sell my house. The article talks about how to get people interested in buying your house, in a tough market. The article also mentions the market being “payment” and “mortgage” driven, which I think it should always be. If it were this way for the last 2-4 years, we wouldn’t be in this huge housing crisis.

If you’re trying to sell your house that you bought in the last 2-5 years, you may have a hard time getting the price that you want, because you’re probably looking at selling it for a price equal to or less than what you paid for it. And if that is the case, staying in your house rather than trying to buy a new one would probably be the best option.

1. A positive cash flow - meaning that you are earning more than you are spending each month.
2. A desire to take charge of your mortgage.

I think there are some other requirements, just as there are with a money merge account, such as:

• A zero-balance Home Equity Line of Credit (HELOC) that allows you to transfer money in and out of it.

I’m just going to paraphrase and condense the version that was on eHow, but feel free to check out the full version of the article at the bottom of this post. In this example, we are assuming that we have a $200,000 mortgage and that we make $5,000/month.

1. First determine your positive cash flow - Take the combination of all your bills (mortgage, credit cards, utilities, car payments, etc.) and subtract this amount from your monthly income amount. This will be your Monthly Cash Flow - if the number is negative, this option will not work for you. The more positive cash flow you have, the more interest you will save, and the faster you will pay off your mortgage.
2. Write a check to deposit the entire amount of your paycheck to the principal balance of your mortgage. This will make your new mortgage balance $195,000, so for the entire month, interest will accrue on $195,000 rather than $200,000. Next step, paying bills.
3. Get a credit card that gives some sort of rewards if you don’t already have one. Credit cards basically allow you to “borrow” free money for up to 45 days, as long as you pay your interest off in full every month, you will not accrue any interest charges. Pay all (or as many as possible) of your bills on your credit card, and for simplicity sake, let’s say that we make a total of $2,000 in charges.
4. Next, you’ll use your home equity line of credit (HELOC) to pay off your $2,000 credit card balance and your $1,000 mortgage payment. So now, your liabilities are your mortgage $195,000 and your HELOC $3,000. A total of $198,000.
5. With your next paycheck, payoff the balance of the HELOC - with the balance of the HELOC being paid back in approximately a 1 1/2 months time, any interest that accrues will be minimal, and certainly much less than the interest that would have accrued on $200,000 vs. $195,000.
6. Continue this process repeatedly.

Read the original article on eHow.

My biggest question is this: after the HELOC balance is paid back, we still have $2,000 in positive cash flow. Should this amount be put directly back into the principal balance on your mortgage, or should you wait for your next full paycheck?

After considering this method in depth, I realized that you have to be fully ready to commit all of your extra money directly to your mortgage. Something that I think a lot of people would have a hard time with. I also wonder if the credit cards are even necessary, or if doing that just helps to further offset interest by not having that balance on your HELOC for an entire month or so.

I’d love to hear comments, if any of you have ever experimented with mortgage acceleration, money merge accounts, or offsetting your mortgage interest with a HELOC account, I’d love to hear your opinions and success/failure stories.

Pros and Cons of the extra payment - Yes, it was tough sending in an extra $2,500, but it is great being able to look at my mortgage statement and to see the principal balance drop more in one month than it has in the past 10+ months. Stay tuned for more updates as I try to pay down my mortgage balance in half the time!

1. Your existing mortgage.
2. A Home Equity Line of Credit (called an ALOC within the money merge account system - Advanced Line of Credit)
3. Money Merge Account Software

Basically, the way it works is all income that you recieve goes toward paying off the balance on your ALOC. Any income that you receive, goes straight into that account. As your you make deposits, the money merge account software tells you when to make payments toward your mortgage, the primary thing that helps you pay down your mortgage in 1/2 the time or less is the payments that the money merge account software tells you to make - it schedules larger than normal monthly payments which lowers your principal balance faster, this in turn, decreases the amount of interest that you’ll be paying toward your subsequent mortgage payments. While the ALOC will be charging you interest on your outstanding balance (it must be an open-end interest calculation), the MMA software predicts this and minimizes (or cancels) the amount of interest that you’ll be paying on your primary mortgage.

All in all, money merge accounts seem like they can definitely help cut down on the time it takes to pay down a mortgage, however it will require a lot of discipline on the part of the borrower. In the end, it is ultimately up to you, the borrower - are you disciplined enough to put all of your extra money directly into your mortgage? Could you just do this yourself, or is the software necessary?

I don’t believe it has been released yet, but I recently read an article that mentioned there may soon be a Credit Card based money merge account option. I

Last night I imported all of my accounts and clicked around a little bit, so I really don’t have too much to share in terms of all the functionality, but just from the little bit of clicking that I did, I can tell you that Mint offers tons of functionality, so stay tuned for updates on my favorite features and functionality of Mint.

My one problem with Mint is that it doesn’t seem to support Firefox very well - At least not the Firefox 3 Beta.

My simple answer to this question is this: It would only be more beneficial to invest this money if you’re very disciplined with money management. I say this because I have many friends who spend their savings accounts as quickly as they put money into it. Below, I’ll discuss the pros and cons of mortgage acceleration through increased principal payments.

Pros

• You can potentially save $1,000’s to $10’s of thousands on payments to interest.
• Your dreams of home ownership will become true in a shorter time frame.
• After paid off (in a shorter time), you can use your mortgage payments to acquire a 2nd property, a rental property, or some fun toys that you’ve wanted for years.

Cons

• By investing, rather than making extra payments, you can earn $1,000’s of dollars in extra interest income.
• By paying off your mortgage early, you no longer get the tax break of writing off your interest expense.

I’m sure that there are many more pros and cons, but I can’t think of any right now. If you have any that you’d like to see added to the list, just shoot me an email and I’ll add them. I found this post helpful when looking into mortgage acceleration.

My June mortgage payment had already been made, but I still wanted to get in an additional principal payment prior to my July payment being made, so I wrote a check for $2,500 and sent it in today. This payment will basically be applied as additional principal to my June payment (as long as the receive and process it prior to my July 1st payment), so let’s take a look at what this will do to my mortgage balance and next months principal and interest payments.

Now, with the obvios fact aside that I spent an extra $2,500 on my June mortgage payment, let’s look at the resulting July mortgage balance and the resulting principal and interest payments. I’m decreasing the amount I’ll have to pay to next months interest by $13.28 - Yes, this is very small when compared to the $2,500 I just forked out, but let’s consider it over the course of the next year.

Assume I don’t make another additional principal payment, then I’ll be paying $14,857.40 just to interest over the next year, whereas if I had not made the additional principal payment, I would have been paying an additional $15,021.52 to interest over the next year. A differenct of $164.12. I still have 28 years remaining on my loan, so considering just a year is a very insignificant amount, but if we compare it to what I’ll pay to interest for the remainder of the life of my loan, that’s where we’ll see bigger savings. With the additional $2,500 principal payment, I’ll be paying $262,553.97 toward interest over the remaining live of the loan, and without the additional principal payment, I’ll be paying $274,772.74 to interest over the life of the loan. This is a savings of $12,218.77 - just for making an additional $2,500 payment today. More importantly, I’m also shaving 9 payments off of my mortgage, having my final payment of $373.92 coming due on 12/1/2035 rather than 9/1/2036.

Some of you may be asking yourselves, “Why would it matter when the additional payment is received, it gets applied either way, right?”. It does get applied to my mortgage balance either way, however, the reason that I want to make sure that my additional principal payment is sent in and applied prior to my next automatic mortgage payment is because it will help to decrease the amount of interest that is paid on all of my subsequent mortgage payments. Why is this? Let’s say for simplicitys sake that I have a $100K loan at 5% with a monthly payment amount of $536, and I’m going to send in an additional principal payment of $10K. If I don’t send my additional principal payment, about $120 will go to principal, and $416 will go to interest. However if I pay my $10K additional principal payment (I realize this is a large extra payment, but it just helps to illustrate a point), then my next regular mortgage payment will have about $375 go to interest, and about $162 go to principal. It basically reduces the amount of interest that you pay in the long run. In this example, I save about $40 on interest in one month, over the course of the year, that will add up to be about $500 saved in interest. It adds up, and obviously, the quicker and more drastically that you can lower your principal balance, the less money you’ll be spending on interest every month.

Will this work for everyone? Absolutely not. First, you’ll need extra money every month in order to be able to make extra payments. Secondly, there are people of the school of thought that you’re quite simply an idiot if you pay off your mortgage early because you’ll be losing the tax benefit of being able to write off your interest paid. I think its absolutely retarded to be excited about writing off your interest expense, but that’s an entirely different story.

Ed McMahon, who for decades appeared as Johnny Carson’s sidekick on “The Tonight Show,” is fighting to avoid foreclosure on his multimillion-dollar Beverly Hills home, according to published reports.

The former “Star Search” host was $644,000 behind on payments on $4.8 million in mortgage loans when a unit of Countrywide Financial Corp. filed a default notice Feb. 28 with the Los Angeles County Recorder’s Office, The Wall Street Journal first reported late Tuesday.

-Associated Press

I read an article awhile back that said if you want to pay down your mortgage in half the time, all you have to do is send in a payment equal to double the principal each month. So lets take my latest payment for instance: On June first, my payment amount was $1,791.57 - of this amount, $246.57 went to principal, $1,263.20 went to interest (a waste of money in my opinion) and $281.80 went toward my escrow account to pay for my property taxes. Let’s say that I wanted to pay my mortgage down in half the time, then I would simply have to double the principal amount from $246.57 to $493.14, bringing my total monthly payment to $2,038.14. Really not that big of a difference. I could simply make up this amount by not going to lunch everyday - figure I spend on average $10/day on lunch over 20 days, there’s $200 bucks right there. Almost the full amount that I need to make a double principal payment. Instead of changing my lifestyle though, I’m going to use the income generated from this blog (and some of my other online ventures) to make additional payments to principal.

To start this, I’m going to be sending in a large principal only payment in during the middle of June so that when my July payment is calculated, more of my payment goes toward principal since the interest owed will be calculated on a lower amount. During June, I plan to send in a principal payment in the amount of $2,500 + whatever other income I can pull from this blog during that time. The $2,500 is my 2007 tax return, and since I haven’t blown it on anything stupid yet, I figure that I might as well put it to good use.

Stay tuned for updates on my personal mortgage acceleration program as I’ll be creating posts once or twice each month detailing the benefits (and the perils) of putting extra money into my mortgage each month.