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spinoff to overpaying mortgage...

christy Posted: Feb 24, 2005 05:59 PM+

christy MEMBER SINCE: 1/02 TOTAL POSTS : 6763 WEDDING DATE: Apr 18, 2003

Posted: Feb 24, 2005 05:59 PM

spinoff to overpaying mortgage...

I learn such great things on this site. Here is my question, is it worth it to overpay on your mortgage if you do not plan on staying in that home? In other words, is it worth it for me to do this in my condo if I plan to buy a house in the near future?

peabody Posted: Feb 24, 2005 06:16 PM+

peabody MEMBER SINCE: 7/03 TOTAL POSTS : 3194 WEDDING DATE: Oct 01, 2004

Posted: Feb 24, 2005 06:16 PM

Re: spinoff to overpaying mortgage...

Posted by christy

I learn such great things on this site. Here is my question, is it worth it to overpay on your mortgage if you do not plan on staying in that home? In other words, is it worth it for me to do this in my condo if I plan to buy a house in the near future?

IMO, Yes. WE just refinanced, we had a 1st mortgage and a line of credit. We always overpaid the line of credit. So when we refinanced we borrowed less.

Your goal on your next home is to borrow as little as possible and have the mortgage be manageable. So the more you make on your house, the more you will have as a down payment. Does that make sense?

christy Posted: Feb 24, 2005 07:00 PM+

christy MEMBER SINCE: 1/02 TOTAL POSTS : 6763 WEDDING DATE: Apr 18, 2003

Posted: Feb 24, 2005 07:00 PM

Re: spinoff to overpaying mortgage...

Totally makes sense...thank you so much!

Jmg11 Posted: Feb 25, 2005 11:33 AM+

Jmg11 MEMBER SINCE: 7/04 TOTAL POSTS : 970 WEDDING DATE: Aug 19, 2004

Posted: Feb 25, 2005 11:33 AM

Re: spinoff to overpaying mortgage...

IMO NO - not if you are moving soon - BUT no one can really give you a good answer for YOU - except a professional. This is a great question to ask an accountant. It all depends on how much you still owe/how much you want to spend on your new place/how much you have liquid, etc...

MrsJ Posted: Feb 25, 2005 11:41 AM+

MrsJ MEMBER SINCE: 4/04 TOTAL POSTS : 2089 WEDDING DATE: Nov 27, 2004

Posted: Feb 25, 2005 11:41 AM

Re: spinoff to overpaying mortgage...

IMO I have to say no also. If you are not planning on staying, I wouldn't overpay anything. Save your money instead and invest it or keep in in an account and gain interest on it. Then use that toward your downpayment along with any proceeds you have from the sale of your condo.

sophie78 Posted: Feb 25, 2005 12:02 PM+

sophie78 MEMBER SINCE: 4/03 TOTAL POSTS : 3426 WEDDING DATE: Sep 18, 2004

Posted: Feb 25, 2005 12:02 PM

Re: spinoff to overpaying mortgage...

No. If you are staying a short time (like under 5 years) it won't matter.

Sassyz75 Posted: Feb 25, 2005 01:18 PM+

Sassyz75 MEMBER SINCE: 11/02 TOTAL POSTS : 4848 WEDDING DATE: Jan 31, 2003

Posted: Feb 25, 2005 01:18 PM

Re: spinoff to overpaying mortgage...

I thought when you overpay it goes right to the principle, not the interest.. so wouldn't that increase equity?

KarenB Posted: Feb 25, 2005 02:22 PM+

KarenB MEMBER SINCE: 1/03 TOTAL POSTS : 681 WEDDING DATE: May 15, 2004

Posted: Feb 25, 2005 02:22 PM

Re: spinoff to overpaying mortgage...

Unless an investment pays more in interest than you are paying for your mortgage, you should add to your morgage payments.

i.e.

if your mortgage is 5%, and you earn 3% in a savings account or other place, then pay more towards your mortgage.