No Credit Needed speeds up mortgage payback with micropayments

No Credit Needed, a long-time debt reduction blogging colleague, after having gotten rid of his non-mortgage consumer debt, has been chipping away at the big one: his home mortgage.

He’s on track to pay off his 15-year fixed rate mortgage three years early, and is aiming to get it paid off five years early.

They’re making additional micropayments throughout the month.  These are principal-only payments.  This has two effects:

  • The micropayments reduce the balance immediately.  This means that the interest accrues on a smaller balance, immediately.
  • The next regular payment will include more principal and less interest.  Every payment following an extra principal payment works a little harder than it would otherwise.

So this is a great thing to do, especially if you have an ample emergency fund and have a consistent, well-planned budget.  Any extra money that comes in can be thrown at the debt.

Keep doing what you do, NCN, and we’re praying for a mortgage payback time of less than ten years!

Girl Meets Debt is under $50k

Nice update from Girl Meets Debt.  The sum of her personal loan and student loan is now under $50,000!

“I haven’t been under the $50k mark in years!!!” she exclaims.

She admits that it’s tough to find the energy to stay on track with as much debt as that.  Judging by her numbers at the end of April and the end of May, it looks like she’s poised to gain a lot more momentum.  Her personal loan is now only about $5,300 after knocking nearly $1,400 off the balance this past month.

Getting rid of the lowest balance first is a great strategy because it frees up the payment and lets you pay down the other debts faster.

Keep up the good work, Girl Meets Debt!