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I understand what you're saying but I have a hard time believing that the Murray's wouldn't accept early payment in full and be done with it.

Here are two words that should help everyone understand this from the Murray's standpoint, Capital Gains. The purchase terms allow them to pay Capital Gains over the period of the contract instead of paying all of the tax in the year of purchase. From what I understand of the IRS rules, the payments could be accellerated without there being a tax penalty.

Whats the tax penalty ? It still may be worth the RRGCC to pay for the penalty and save in the long run.

Please check out our PMRP FAQ's page http://www.redriverclimbing.com/fundraiser/FAQ.php

If anyone has any other questions, please ask away and I'll get them included on the page.

Thanks!
~Michelle

Thanks Michelle, that's an awesome resource!

Big thanks to Morgain (Spragwa) for pulling all the info together for me! Hopefully, it'll help answer some questions for people.

Artsay wrote:

maine wrote:IE a 30 year mortgage could be payed off in 22 years by making one extra monthly payment per year. Additonally paying your mortgage twice a month (1/2 each time) saves you serious cash.

Actually, I don't think that's true anymore. That logic was true when interest rates were 8-9%. Now they're much lower (Our 15 year loan is 4.75%) so it's not as much as an advantage. It doesn't hurt to pay more and apply it to the principle, but those calculations of one month extra/22 year payoff, etc., just aren't correct anymore.

We refinanced to a 15 year mortgage and are saving over $100,000 in interest. Crazy...

Actually they are still close but it turns out to be 23 years. Not to mention the significant savings in interest. These principles hold true regardless of the type of loan (car, house . . .)interest rate or amount financed. Check out this site http://www.thecu.coop/calculators/jv_bimtg.asp There are a million other sites online that will give you the same result.

And well, my dad knows his shit

I plan on paying my house off in 5 years. Does that result in a savings in interest?

If everybody matched what they already donated, we'd be there!

maine - Not to knock on dear old dad but those numbers simply aren't true given a low interest rate. We were paying two extra payments a year on an old mortgage using that logic until I learned how the numbers really break down.

Paying one extra payment a year on an 8.50% 30 year loan pays it of in 22 years
Paying two extra payments a year on an 8.50% 30 year loan pays it off in 18 years
Paying one extra payment a year on an 4.75% 30 year loan takes pays it off in 26 years
Paying two extra payments a year on an 4.75% 30 year loan pays it off in 22 years

So yes, you do still earn considerable savings making extra payments but, if you have a low interest rate, you will not pay down your 30 year loan at the same rate as that old logic states.

http://www.mortgagesaver101.com/amortiz ... lator.html

If we are applying this logic to the PMRP, anyone want to calculate how much we'll save given that this is only a once-a-year payment that WILL be paided off within the next 10 years?