My new plan...

[chatterweb]

We have an interest only mortgage which I love. It is fixed until April of 2007.
I want to begin to pay some towards principal, since we know in our gut we love where we live too much to do anything but retire here.

Here is my plan:
Use rental income(800.00) plus 200.00 a month to pay down the principal.
12060 per year, and factor in rents will rise in the future and so will our wages (Union contract)
60300 in 5 years= 236700.00

Wow! That is a big change from 297000.00.
Oh I hope we can be so frugal!
We must, we cannot afford not to.
I will update my progress in my siggy...
This is, of course, hoping our rental is rented! So we will be off a little in the Actual amount we pay off, but at least it is a start...

[PrairieRose]

It's great that you're planning to start paying soon on the principal of your mortgage. I hope your rental stays rented and you get to stick with your plan.

[FrugalMomof3]

Seem like you have a great plan and please keep us posted on your progress.

[chatterweb]

Edited to add the reset here on our primary is due 4/2011! Not 2007!
We pay 4.5% interest.
I am closely tracking the rates and looking for another interest only 10 year loan
to replace this loan with no prepayment penalty.
I like interest only because when you pay extra to the principal, the next mortgage due reflects it and the monthly payment goes lower!
Not advising it, just my personal experience.

Anyways, come H@#$! or high water, I am going to work hard to pay it lower.

And if rents increase I will up our contribution 300.00 to 400.00 max per rental increase.

[banana]

Why not lock in at a fixed rate that way you dont have to worry when and if the rates rise? That way you will definitely know what your payments will be and you will be able to pay it down faster.