Mortgage calculator/app

[sloonan]

We bought our house a few years ago (2015) and have been paying our mortgage plus a few extra dollars toward principal with each payment. With the interest rates so low I was wondering if it might be worth it to refinance to a 15 year mortgage.
Right now we are still paying for PMI but that should be paid off by Christmas and then we can apply that amount toward the principal.
Do you know of a calculator online or app that can help me answer the question of how many months left I have on my mortgage payments. I would also like to see if I adjust the extra payment amount toward principal what that would mean as far as months left of the mortgage.

[wunderbarsafari]

Does your lender have an online portal where you can view your loan info? I’ve paid additional principal and my amortization date has been updated to reflect so online. Alternatively, if you have an updated principal to interest ratio chart to scroll to the end of, it should be dated appropriately.

[sloonan]

My lender (Cenlar) sucks big time and just offers the moat bare bones info possible.

[Axel]

I, too, am contemplating a refinance. I've been told that as a rule of thumb, one percentage point drop or better is worth refinancing (but it depends on the size of your loan, years left, closing costs)

Try this Excel template: https://templates.office.com/en-us/l...ule-tm03986974

I set up something similar to track student loans and it's a wonderful tool. It should let you play around with number of months left to see what the payment would be, or, conversely, you can punch in the amount you want to pay and then scroll down the amortization schedule to see how many months until you reach zero.

[Axel]

Here's a simple calculator: https://www.bankrate.com/calculators...alculator.aspx

I punched in the original parameters of my mortgage and it got the payment to within 10 bucks of reality, including taxes and insurance in escrow

It also creates amortization tables

[dartamon]

Why pay it down sooner? Let inflation take care of it at these rates.

[shadow191]

Any of the calculators you can Google will work to calculate effect of paying down principal faster. But to know how much you owe, you really need to get it from your lender. You can calculate it on your own but it's still best to get actual number. No matter how bad the lender, they do have to provide the info.

Also, you should ask yourself why you want to pay it off quicker. From a pure numbers standpoint, it usually makes more sense to use the leverage and keep your money invested (though the market is pretty high right now). If it's a peace of mind thing, then go for it.

I went to a 15 about 5 years back and my rate is a little under 3%. I keep debating whether to pay it off since it's my only debt left but then always hold onto the funds just in case. Especially right now, having cash on hand is a safer bet for me.

[desertT1]

To free up cash for other stuff would be my guess.

We recently got out of the PMI portion, which was a pretty substantial bump to go after other debts. I would suggest looking at your path if you keep things as is, and throw the same payment at your loan once PMI is no longer being charged. Nothing would change for your monthly expenses, but it would start going a lot faster. Just another option to look at if a refi isn't the way you go.

[gabe]

Why pay it down sooner? Let inflation take care of it at these rates.

That's actually pretty solid intel. Inflation is going to boost prices of homes all over and you might as well ride the wave. It's rarely worth paying for an appraisal, bank fees, and a realtor to handle re-closing a new loan. Beware the mortgage brokers trolling around these days. I had a coworker get hosed by Quicken Loans and their refinance scheme. If you're going to refi do it with a local credit union and try to get it into a portfolio loan so it's not being held by the Fed and possibly subject to term changes as the economy changes.

[travis1581]

I ended up refinancing from 3.5 to 3.0%. The way I determined it was worth the plunge was the amount I would be saving in interest would pay for the closing costs in 11 months! I have no intentions on moving in the next year so it was a pretty simple decision.

[Axel]

I understand that the math supports keeping a mortgage and investing the extra cash, as opposed to paying it off sooner. In theory, one should pay no more than the minimum each month on any debt less than 7% or so, since you can easily take the extra cash and get a better return in the markets with an index fund. If I followed this logic, I would never have paid down any debt early, except for refinancing a couple usurious student loans.

Philosophically, I can't square "financial independence" with leveraging debt. The above scenario works fine until you hit a market crash and lose your job just as you fall off the roof and bust a femur trying to repair the shingles you can't afford to replace.

[shadow191]

Fair points on balancing debt with assets and cash flow. I think the answer is somewhere in the middle of putting everything in an index fund and paying minimums vs. paying off everything early. To me, the choice is about where every dollar should go. If you take your cash and pay off mortgage and other installments early at expense of liquidity, then you lose your job, you'll still be in trouble because good luck pulling equity from your home via HELOC or Refi without a job. On the other extreme, and to your example, if you throw everything in an index fund and the market drops 30% and you lose your job, good luck selling the funds at a loss to keep your house.

Right now I'm in the middle of debating what to do with mortgage. It's under 3% and I've got less than 10 years left on it since we've been throwing extra payments at it. Right now high yield savings accounts are only yielding ~1.5% and I'm hesitant to put more money in the market as the 401k's have enough exposure. Plus I'm not even getting a full deduction on the mortgage interest anymore due to the SALT cap. But nervous to put too much into mortgage as job loss is always a possibility and I'd probably rather have the cash then.

I understand that the math supports keeping a mortgage and investing the extra cash, as opposed to paying it off sooner. In theory, one should pay no more than the minimum each month on any debt less than 7% or so, since you can easily take the extra cash and get a better return in the markets with an index fund. If I followed this logic, I would never have paid down any debt early, except for refinancing a couple usurious student loans.

Philosophically, I can't square "financial independence" with leveraging debt. The above scenario works fine until you hit a market crash and lose your job just as you fall off the roof and bust a femur trying to repair the shingles you can't afford to replace.

[Axel]

^Agree 100%. I balance retirement investment, emergency savings, debt reduction.

And also some fun. I might die tomorrow and I don't want to have the biggest stock portfolio in the cemetery

if I'm not mistaken, the Ramsey Baby Steps don't have you investing in retirement until debt is paid off and an emergency fund fully built. I think that gives up too much compounding in critical youthful years when every dollar you put down can earn for 30, 40 years before you need it again. That might be worth it to pay off insane 20% interest credit card debt but fortunately we never went down that rabbit hole. For car loans, most student loans, mortgages--I consider it a form of diversifying to pay some of that down quicker while also building a portfolio

[dartamon]

Philosophically, I can't square "financial independence" with leveraging debt.

You'll fail your MBA courses. It's all about debt with a lower interest rate than the rate of return. That doesn't mean that you don't plan for emergencies, but I got 2.78% APR with a fed inflation target of 3%. The bank is paying me to keep that mortgage. Adjusted for inflation, I will be paying out $466k on a $480k principal.

[shadow191]

What you're doing is the logical way to do things and how most businesses run. But a corporation doesn't have to sleep at night - that's a big consideration. If it causes someone anxiety to have the debt even though they're able to service it, and paying it off makes them feel better, they may want to do that. Also the amounts for personal debt are small enough that it just doesn't matter that much. Ie, in your example it's $14K over 15 or 30 years? Not that big of a number annualized. Same applies to people who shop around for high yield savings accounts. I never understood hassle of opening a new account with a new bank to pick up 50 basis points or less. Or to get a promo rate good for 6 months or even a few hundred dollar sign on bonus. A lot of mental energy and hassle for a few hundred bucks at the end of the day. Even if someone was moving $100K difference was like a few hundred bucks a year.

All of these things matter when you're doing this for a company and it's millions or billions but for the amounts involved in personal finance, it matters so much less. I do optimization and strategy for a living and think about this stuff a lot as to how it applies to my personal life. There's just not enough multiplier to impact a household much. At work, we can run things out to 10+ year ROI in decision making and if we can shave a few basis points out of billions in a pension plan then it's millions of dollars in savings. Can't do that for household finances.

FWIW, former financial advisor with an MBA. Peace of mind matters a lot more than people will admit. And it's a tradeoff most people should make. I had plenty of clients who paid off their mortgage even though it made more sense to stay invested. Also had plenty of clients who couldn't take the market volatility and were much more conservatively invested than needed. But in both of these scenarios, clients were happy with their choices and felt good about them.

Final point, you're using an inflation target which is just that, a target. So on paper your plan makes sense but is dependent on an assumption that may or may not come to be. You might end up better off or worse off depending on which way it goes.

You'll fail your MBA courses. It's all about debt with a lower interest rate than the rate of return. That doesn't mean that you don't plan for emergencies, but I got 2.78% APR with a fed inflation target of 3%. The bank is paying me to keep that mortgage. Adjusted for inflation, I will be paying out $466k on a $480k principal.

[dartamon]

If you want to sleep at night, pay off your mortgage as slowly as possible at low interest and keep a cash treasure chest. In this country you can walk away from the mortgage, things go south you can return the keys to the bank. It'll screw up your credit history for 7 years, but you probably won't care if you're in that much financial trouble. A cushion of cash instead of paying off the mortgage early that can float your expenses 6-12 months is the best peace of mind. But hey, I'm the logical opinion, I can't speak for other people.