Mortgage payoff scenarios
I'm wanting to explore the effects of paying off all or part of my mortgage. I've created a base profile with the mortgage balance, payment amount, and years remaining. I'd like to explore at least 3 scenarios:
1. use cash savings to pay off 50% of the mortgage immediately. My mortgage allows me, for a $500 fee, to reamortize the new balance. This would result in a paymnent substantially less than 50% of my current payment.
2. use cash savings to pay off 50% of the mortgage immediately. My mortgage allows me, for a $500 fee, to reamortize the new balance. This would result in a paymnent substantially less than 50% of my current payment. I would then use the savings to make extra principal payments over the next, say, 10 years, to finish paying off the mortgage.
3.use a combination of cash savings and selling non-retirement mutual funds to immediately pay off 100% of the morgage.
Could you help me with how to set up these scenarios?
RSS
Create a copy of your base profile. For the first case, enter the new mortgage figures, reduce your savings by the amount necessary to pay of that portion of hte mortgage, enter a $500 special expenditure to account for the amortization fee, run your new profile and compare results.
Do similar things for the other two variants. You'll have to be clever, particularly with the case where you're paying off additional principle but you should be able to work it out (just remember if you double your principle payments you halve the number of payment periods).
Best,
Dick Munroe