$2.21 to $9.82 now $19.13

These are the extra amounts of principal payment I have made monthly during the past few years.

In 2009 I was paying a certain amount of money each month on my 1st trust.  About October 2009 I received an escrow analysis from my credit union.  Based on that analysis, my monthly payment would be reduced, by a whopping $2.21.  Not much.  Well, I wanted to start paying down the 2nd trust (and at the time all extra $$$ was applied to paying off the condo mortgage).  I decided to making a principal payment of $2.21 each month after paying the monthly payment for the 2nd trust.  So the grand total extra principal reduction to my 2nd trust (from December 2009 to November 2010) was $26.52.

About October 2010 [after I had paid off my condo] I received an escrow analysis from my credit union.  With the ongoing poor housing market, home values were still flat or falling and my property taxes were reduced.  Based on the original amount I paid in 2009, the difference starting December 2010 would be $9.82 per month.  Still chump change.  But I stuck to my guns of applying this extra money to my 2nd trust.  So the grand total extra principal reduction to the 2nd trust (from December 2010 to November 2011) was $117.84.

This October I received another escrow analysis from my credit union.  The monthly mortgage payment for the 1st trust dropped against (versus the original monthly payment in 2009).  The difference now is $19.13.  I am now in auto mode – apply all extra money to 2nd trust.  I  made my first such payment today.  It’s nice to have a significant principal payment (significant compared to $2.21).  If I stay on course, by November 2012, the grand total extra principal reduction to the 2nd trust will be $229.56.

Slow but steady.  The snowball (extra principal payment) gets bigger and bigger.  And, the 2nd trust will be paid off early (even if it’s just 3 or 4 years early).

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