Hit a small milestone with my cash out refi today and honestly shocked myself

I closed on my cash out refi about 6 months ago and pulled $28k out for a new roof and some kitchen updates. Been tracking my payments on a spreadsheet just to see how it all shakes out. Today I realized I've already paid down over $4k of the principal just by adding an extra $200 each month. Has anyone else tried the extra payment method and did it actually save you a lot in interest long term?

2 comments

2 Comments

luna_kim4010d ago

Tracking on a spreadsheet" - oh wow, that's way more organized than me lol... I threw an extra $150 at mine for a year and felt so proud until I realized I'd paid like $1,800 extra and the interest savings was barely enough to buy a pizza. But seeing your $4k drop in 6 months is actually kind of motivating, maybe I just need to bump it up to $200 and actually commit this time.

claire_butler110d ago

Heard Dave Ramsey say that throwing extra money at a mortgage doesn't really move the needle unless you target it at the principal. I used to just pay extra monthly like you did and got nowhere. So I switched to biweekly payments instead, and that alone knocked my amortization down by about four years. That plus an extra $200 a month probably cuts off six years total. The spreadsheet thing is cool but honestly just setting up the payment schedule with my bank did all the work for me.