Last month (April):
Years left: 0.91666666667
P =$1,161.61, I =$52.79, Escrow =$809.48
This month (May):
Years left: 0.833333333
P =$1,166.21, I =$48.19, Escrow =$812.79
Amount saved from prepayment: $0
Our escrow went up as it does almost every year. When this happens, Wells Fargo gives us the option to pay the difference upfront to keep our payments the same or smaller.
Used to be when this happened I’d pay the difference so I could prepay more each month when I rounded the number up to a round number when writing the checks. Also I like paying stuff early so I don’t have to worry about it later when I might have less money than I was expecting.
But we’re not currently doing any prepayment (since Paradise is expensive and I’m at half pay), not even the little rounding up prepayments that we did when we were just starting the mortgage. It bothers my OCD a little bit not to write a round number on the check, but I’m getting used to it.
And because we’re spending more money than we’re taking in (not counting retirement savings) and because we have less than a year on the mortgage and there’s not even a full year left for the escrow, I decided to let them increase our monthly payment for the second time this year.
(Note also that that $812 or more will be the minimum average monthly cost of home ownership once we’re done with the mortgage not including utilities or repairs– home ownership isn’t free!)
Would you prefer to pay increases upfront or to amortize payment increases?