Posts Tagged Mortgage accelerator

Corporate Barbarian Links: Graduation Party Edition

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We threw a graduation party for my son, two weeks prior to his real graduation.  We did it early because we wanted our relatives to attend, and didn’t want to interfere with everyone’s summer vacation plans.  It was great to see family and friends that I usually only run into at funerals.  Here are some great posts from my friends on the internet:

The Trizle Team wants you to reset your goals when you suck.  I work in the defense industry, and this is a common practice in earned value management;

David at Simple.Organized.Life says that having order is a hallmark of living a simple life.  I agree.  Having too much stuff, and nowhere to put it, generally causes more stress for me;

David Seah gives his impressions of the Inka pen, after owning one for five years.  I like products that stand the test of time, and this pen looks very well-built;

Clever Dude wants you to take your spouse along on a business trip.  I’ve done this in the past, and it worked out fine.  My per diem covered our meals, and the hotel room was on the company’s dime;

Five Cent Nickel shows us how to pay off our mortgages early.  I’ve already followed this route, and it’s nice not to have that ginormous payment looming every month.  I’ve put together a simple amortization table that you can use;

Mr. Tough Money Love tells us things he doesn’t like about the government takeover of General Motors.  Whether you’re a Democrat, Republican, or an Anarchist, he brings up some intriguing points;

Kevin at No Debt Plan explains why he didn’t go to a top tier MBA program.  I didn’t either, and I’m doing just fine;

Passive Family Income tells us why multitasking leads to inefficiency.  I know that I do much better when focusing on one task at a time, and that multitasking leads to mediocrity;

Blunt Money shows us how to create a workable budget.  I use an Excel spreadsheet myself, and you can find a blank copy in this post;

David at My Two Dollars thinks that working more for the same pay may not necessarily be a bad thing.  It’s always good to show the boss that you’re a top performer, and you can pick up some new job skills, too.  It might even save your job;

Go To Retirement shows us how to simplify our financial lives.  I’m a big proponent of going paperless, too.  Check out my foolproof file-naming system;

Matt at Debt Free Adventure shows us the silver lining to the recession.  I don’t have any major purchases coming up, but a few extra bucks saved here and there would be welcome nonetheless;

Scott H. Young wants us to escape the toxic friends that hold us back.  I’ve tried not to associate with negative people, and Scott’s advice is right-on;

Andy at Tight-Fisted Miser talks about frugality and weight loss.  He has no problem sticking to a budget; junk food is a different story;

Steve at Brip Blap wonders: Will people change?  I think people change easily for the short term, but slide back into their old habits;

Flexo talks about when going into debt is worthwhile at Consumerism Commentary.  I’ve done this with 0% credit card arbitrage;

Dusty at Chasing the Bull gives a recap on building his passive income.  He evaluates his strategies, and adapts them for the future;

Weakonomics is holding a contest, and the prize is a copy of the book Biography of the Dollar.  I’ve entered; it looks like an interesting read;

Peter at Bible Money Matters talks about getting back you budgeting momentum.  He gets his mojo back by taking some time off;

David at The Good Human lives up to his name by constructing a solar space heater that he plans to give away.  Nice job, David!

Enjoy the links!  But come back and visit…

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A Simple Mortgage Amortization Table

Kevin over at the No Debt Plan blog recently advised his readers to avoid mortgage accelerator programs like the plague.  He reasoned that you could set up your own mortgage accelerator program by adding 1/12 of a payment as additional principal to each month’s payment.  I agree with Kevin. You can save a boatload of interest by making extra principal payments.

Sending in extra principal payments sounds good, but I think you need to see the impact - namely, how much interest you can save.  So, I set up an Excel file to calculate the interest savings.  You can access the file by clicking on the following link to my mortgage amortization spreadsheet:

Mortgage Amortization Spreadsheet

To use the spreadsheet, just do the following:

  1. Enter your mortgage amount into cell B2
  2. Enter your interest rate into cell B4
  3. Enter the length of the mortgage in years in cell B6

This will populate the rest of the spreadsheet.  It will also calculate your monthly payment (cell B9), and the interest you can expect to pay over the life of the mortgage (cell B11).  If you want to see how much interest you’ll save by adding extra to your monthly payment, just enter the amount into column H in the appropriate month, and the answer will be calculated for you in cell B16.  You’ll also see the number of months that you’ve shaved off the length of the loan in cell B18.

I would definitely recommend sending in additional principal payments if you have the means to do so.  Obviously, this only makes sense after you’ve retired all of your high-interest credit card debt beforehand, and have a healthy emergency fund established.  But if your mortgage is your last outstanding debt, you can count on a return equal to your interest rate.

Now, open the spreadsheet and have fun crunching numbers!

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