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Home > Archive > Architecture > July 2005 > Did you know that.....
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Did you know that.....
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| .....if you pay your mortgage payment every 2 weeks rather than once a month
you'll pay a 30 year mortgage off in 22.5 years rather than 30?
Not only that but the interest paid on the bi-weekly method will save
roughly 25% over the term.
This is called an accellerated pay off and works on the idea that if you pay
on a monthly basis you're only paying for 48 weeks per year (12
months/payments=4 weeks per month=12 payments) rather than the 26 payments
per year the other way. The bottom line is that you are making 1 more
payment per year by doing the accellerated deal.
Make no mistake, the interest on a home loan, amortized over the full 30
years paid monthly is HUGE!.
Total cost is estimated to be 2.5 to 3 times the original cost of the house.
(What that means is that if you purchase a home for $100k, 30 years later
you will have paid over $250k for it. shwew...talk about takin it up the
keester........)
(surely you have better things to do with that extra $150k, like buy a
Countach or something)
Further, it takes forever to gain equity, or get to the crossover point of
paying more for the principle than for the interest, by paying monthly.
If you have auto bank transfer of funds for your house payment this is a
painless process and very much worth the minimal effort to change over.
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| Are you talking about splitting your monthly mortgage payment into two
payments per month, or making a double payment? If it's a split
payment I might look into it, but if it's a double......well I might
have to give up some beer or something. My monthly payment is already
pretty feakin' high as it is, even after I got the city to drop their
tax appraisal by 40k. The bastards had raised it by 60k the year
before........so i guess they only got an extra 20k of tax value outta
me. Now that I write this my initial joy at getting them to drop it is
diminished since it still went up by 20k. S.O.B.s
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| Cato wrote:
quote:
>
> Are you talking about splitting your monthly mortgage payment into two
> payments per month, or making a double payment? If it's a split
> payment I might look into it, but if it's a double......well I might
> have to give up some beer or something. My monthly payment is already
> pretty feakin' high as it is, even after I got the city to drop their
> tax appraisal by 40k. The bastards had raised it by 60k the year
> before........so i guess they only got an extra 20k of tax value outta
> me. Now that I write this my initial joy at getting them to drop it is
> diminished since it still went up by 20k. S.O.B.s
Take a look at a calendar... This month, for example.
If your payments are due on Fridays, and you make a payment every 2 weeks,
this month you will have made 3 payments.
Over the years, these occasional "extra" payments add up!
Notan
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Notan wrote:
quote:
> Cato wrote:
>
> Take a look at a calendar... This month, for example.
>
> If your payments are due on Fridays, and you make a payment every 2 weeks,
> this month you will have made 3 payments.
>
> Over the years, these occasional "extra" payments add up!
Sorry, I think I was being dense. I do remember hearing about this
when we bought our last house. You just readjust your 30 year mortgage
to make bi-weekly payments rather than once a month. These bi-weekly
payments will be 'approximately' half of your monthly payment, but due
to the differences in months you would be making 26 payments rather
than the 12, thus paying out more per year. Did I get it right? My
only concern is outlaying an excessive amount of cash every month.
Ever heard the saying of being 'house poor'? I don't want to be that
person. I have too many friends in that boat with 15 year mortgages
who barely make it paycheck to paycheck because they are dropping a
massive amount on their house. It potentially can work out in the long
run, but they really are suffering hard when their salaries aren't that
high early in their careers.
I'm a bit of a dummy about this stuff(but learning something new
everyday). I need to get my wife and her fancy new real estate license
to check into this. ;-)
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| "Cato"> wrote
quote:
> Are you talking about splitting your monthly mortgage payment into two
> payments per month,
Yes. If you present monthly is $2000 then your payment every 2 weeks would
be $1000.
or making a double payment? If it's a split
quote:
> payment I might look into it, but if it's a double......well I might
> have to give up some beer or something. My monthly payment is already
> pretty feakin' high as it is, even after I got the city to drop their
> tax appraisal by 40k. The bastards had raised it by 60k the year
> before........so i guess they only got an extra 20k of tax value outta
> me. Now that I write this my initial joy at getting them to drop it is
> diminished since it still went up by 20k. S.O.B.s
You don't want to get me going on this.
A year or so ago I asked the question, 'Is it possible for someone to be
taxed beyond their means through no fault of their own?".
The effect was that no one had ever considered that such a thing could
occur, and many couldn't get their head around the concept.
Well, its occurring, as I type, all across the land.
Just wait, in 2 years these ripples will crash on the beach.
Our contract price 4 years ago was $155k with yearly taxes of $2.8k, but as
of right now the tax man has our home assessed at $319k and we haven't
received notification yet of what the tax will go up to. I'm mentally
preparing myself for the new tax to be in the $5k range. Yet there is no
improvement in the services that I receive, or want.
Add to that, due to enormous FEMA fraud and general gov't socialist effects,
that our property insurance has doubled and within a short amount of time my
wife and are getting boxed into a situation where we will lose everything
we've worked like slaves for for a quarter of a century, unless we circle
our wagons right now.
And some have the unmitigated gall to mention that this is the *Land of the
free*?
Only for those suffering from the Stockholm Effect.
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| "Cato"> wrote
quote:
> I have too many friends in that boat with 15 year mortgages
> who barely make it paycheck to paycheck because they are dropping a
> massive amount on their house.
When rates are low, as they are now, a 15 year loan is not the best way,
unless money is no problem.
The thing is, 30 year home loans are real cheap and as long as no other
debts, say a car loan, is incurred at a much higher rate, it is the best
value for the money.
What I am reading everywhere is that the exact opposite is occurring.
People are paying on 30 year notes AND buying new cars at 12-14%, they want
their cake and they want to eat it too.
The 30 year note takes forever to gain equity, after 10 years if there is
little appreciation you are not much better off than a renter, and the
consumer debt is keeping people broke. Its an amazing thing going on in the
financial cycle and make no mistake, it is a cycle. Historically the only
tangible that can hold its value is real property, but many folks are
refinancing and blowing the proceeds on perishable tangibles, cars, big
screens, etc. When the cycle tops out and the pendulum reverses the impact
will be devasting. Google Gary North and watch what he says, he has a weekly
regular over at Lew Rockwells site.
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| Cato wrote:
quote:
>
> Notan wrote:
>
> Sorry, I think I was being dense. I do remember hearing about this
> when we bought our last house. You just readjust your 30 year mortgage
> to make bi-weekly payments rather than once a month. These bi-weekly
> payments will be 'approximately' half of your monthly payment, but due
> to the differences in months you would be making 26 payments rather
> than the 12, thus paying out more per year. Did I get it right? My
> only concern is outlaying an excessive amount of cash every month.
> Ever heard the saying of being 'house poor'? I don't want to be that
> person. I have too many friends in that boat with 15 year mortgages
> who barely make it paycheck to paycheck because they are dropping a
> massive amount on their house. It potentially can work out in the long
> run, but they really are suffering hard when their salaries aren't that
> high early in their careers.
>
> I'm a bit of a dummy about this stuff(but learning something new
> everyday). I need to get my wife and her fancy new real estate license
> to check into this. ;-)
You don't have to do this type of payment in an "official" manner.
To have the same long term impact on your mortgage, all you have to
do is send an occasional extra payment, and have it applied to your
principal.
Check with your lender, concerning the exact number of extra payments
necessary.
Notan
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| In alt.architecture , Cato wrote :
quote:
> Are you talking about splitting your monthly mortgage payment into two
> payments per month, or making a double payment? If it's a split
> payment I might look into it, but if it's a double......well I might
> have to give up some beer or something. My monthly payment is already
> pretty feakin' high as it is, even after I got the city to drop their
> tax appraisal by 40k. The bastards had raised it by 60k the year
> before........so i guess they only got an extra 20k of tax value outta
> me. Now that I write this my initial joy at getting them to drop it is
> diminished since it still went up by 20k. S.O.B.s
Around here each of the two payments were about 55-60% of a normal monthly
payment, when I set up my terms a few years back, I was not comfortable
finding that much more each month and then payments wouldn't match paydays.
Now I may look at it again when it comes due in a year or two....
ron
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quote:
>
> You don't want to get me going on this.
> A year or so ago I asked the question, 'Is it possible for someone to be
> taxed beyond their means through no fault of their own?".
> The effect was that no one had ever considered that such a thing could
> occur, and many couldn't get their head around the concept.
> Well, its occurring, as I type, all across the land.
> Just wait, in 2 years these ripples will crash on the beach.
> Our contract price 4 years ago was $155k with yearly taxes of $2.8k, but as
> of right now the tax man has our home assessed at $319k and we haven't
> received notification yet of what the tax will go up to. I'm mentally
> preparing myself for the new tax to be in the $5k range. Yet there is no
> improvement in the services that I receive, or want.
Go on all you want, misery does love company. We bought our house in
the 200k range and at the time of purchase the tax value was around
180k. They re-adjust here in Dallas every 2 or three years and last
year they put the tax appraisal at around 240k. I was obviously not
happy about that. Our taxes were already close to 5k a year. I went
and had a protest hearing (something everyone I know hears about but
nevers does a thing about), and 'got' them to drop it back to our
purchase price. They felt they were doing me a favor. Thanks for
nothing bitches. Now I'm just waiting for the next appraisal period
when they raise it again. Do you think they'll maintain it at my
purchase price? Not likely! I also found out that the people doing
the appraisals are basically doing 'drive bys' in the neighborhoods and
just raising them based on VERY minimal knowledge. They don't even do
comparibles for the neighborhood to get a real understanding of the
purchase prices. I'm in a recently re-gentrified neighborhood, so
everything is all over the place price wise. I'm actually glad that we
don't live in a neighborhood with a 'good' school district, or I'd
really be taking like a man, like some of my friends in other parts of
the city do.
I'm not really even getting into the bigger issue of government as a
whole. I realize your thoughts on this Don, and I idealogically agree
with you on most of it. I'm just a bit reticent to think it will
change in my lifetime, or even my kids lifetime, or even their kids
lifetimes. Governments have a why of re-inventing themselves to stay
in power. Take a look at the Roman Empire or the British Empire. The
Romans hung on for around 800 years in varying forms of government,
with the Brits still chugging along today albiet re-invented. Just
living in the world dealt to me...cei la vie and pass me a beer. ;-)
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| "Cato"> wrote
quote:
>...cei la vie and pass me a beer. ;-)
Sorry dude, go get your own.
We're on red alert status right now, its every man for himself. I just went
and procured a case and I thought I was gonna have to kill a couple people
in the process. Its pure pandemonium around here right now.
I was pondering all of this on my drive back home, how the 9-11 incident has
changed the tone across the land. While everybody goes on about their day
like everything is cool, but under the surface is a spark of fear ready to
whoosh up at any given second. Last year when the 4 hellions came through
here it was like setting a 12 pak of ether cans next to that spark. Then
yesterday the London thing came down as a friendly reminder of what can be,
and now this Dennis motherfucker is tooting his ominous horn. I'm telling
ya, right now is a dangerous time in SW FL. Everybody is ready to fly off
the handle and lunch someone. There's a sort of giddiness in the air. In one
sense people are jovial and joking that Dennis won't come here, but deep
inside they know. They know that their lives may be in complete turmoil in
less than 24 hours, and there's not one goddamn thing anyone can do about
it.
Getting back to that brew, drop by later next week, I'll have the fridg
restocked by then and we'll tie one on. heh-heh
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| Notan 2005-07-08, 11:26 pm |
| Don wrote:
quote:
>
> "Cato"> wrote
>
> Sorry dude, go get your own.
> We're on red alert status right now, its every man for himself. I just went
> and procured a case and I thought I was gonna have to kill a couple people
> in the process. Its pure pandemonium around here right now.
>
> I was pondering all of this on my drive back home, how the 9-11 incident has
> changed the tone across the land. While everybody goes on about their day
> like everything is cool, but under the surface is a spark of fear ready to
> whoosh up at any given second. Last year when the 4 hellions came through
> here it was like setting a 12 pak of ether cans next to that spark. Then
> yesterday the London thing came down as a friendly reminder of what can be,
> and now this Dennis motherfucker is tooting his ominous horn. I'm telling
> ya, right now is a dangerous time in SW FL. Everybody is ready to fly off
> the handle and lunch someone. There's a sort of giddiness in the air. In one
> sense people are jovial and joking that Dennis won't come here, but deep
> inside they know. They know that their lives may be in complete turmoil in
> less than 24 hours, and there's not one goddamn thing anyone can do about
> it.
>
> Getting back to that brew, drop by later next week, I'll have the fridg
> restocked by then and we'll tie one on. heh-heh
Once again (I remember saying this, not too long ago.), the best to you
and yours.
Notan
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| zenboom 2005-07-10, 6:26 pm |
|
"Cato" <cato_the_stoic@hotmail.com> wrote in message
news:1120838290.362720.4260@g47g2000cwa.googlegroups.com...
<snip>
quote:
weeks,[vbcol=seagreen]
>
> Sorry, I think I was being dense. I do remember hearing about this
> when we bought our last house. You just readjust your 30 year mortgage
> to make bi-weekly payments rather than once a month. These bi-weekly
> payments will be 'approximately' half of your monthly payment, but due
> to the differences in months you would be making 26 payments rather
> than the 12, thus paying out more per year. Did I get it right?
Yes. But you should say "bi-monthly" and "26 split payments v. 12 full
payment"
?:j
My
quote:
> only concern is outlaying an excessive amount of cash every month.
> Ever heard the saying of being 'house poor'? I don't want to be that
> person. I have too many friends in that boat with 15 year mortgages
> who barely make it paycheck to paycheck because they are dropping a
> massive amount on their house.
Wish I could say 'bin there!'....but I've just started!
It potentially can work out in the long
quote:
> run, but they really are suffering hard when their salaries aren't that
> high early in their careers.
>
It seems, a question for everyone : when to play and when to pay ?
<snip>
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