How does everyone else pay off their loans?!?

[Matt Romano]

           Good morning BP! This question has been a curiosity of mine since I've purchased my first property this past July!  I Used a conventional loan and went in with 20% down already.  My question is how do you guys typically structure your loan pay down?  I was told by the first lender I spoke with that if you make ONE additional P&I payment a year (whether in one lump sum, or spread out throughout the year), you shave off nearly 7 years of the 30 year mortgage term.  Now this honestly my first time ever really financing anything in my life (other than a few years worth of student loans and tool loans for my current job).  And I always paid more than the minimum (i.e.: towards the principle) and thus paid off the loan sooner than allowed.  In my eyes, this is seemingly a great strategy because you end up paying less in interest / less all together.  I'm under the impression that the strategy would follow true with my recent mortgage. Ive made 4 mortgage payments so far, and have paid an additional $500 towards the principle each month. If I were continuous with this pay down method, I feel like I could have this mortgage paid off in nearly 15-20 years instead of 30.   Are there any disadvantages to paying a decent amount towards the principle each month? really curious to hear peoples opinions about this, and hear about what they find to be the best strategy in loan pay down! thanks in advance everyone!!!  :)

[Steve Vaughan]

Depending on your current rate and term and what $500/mo means to you overall, I like to punch mortgages in the face a little bit.  

I've paid off 19 doors in the past year, BUT- all were above 6%,  privately held with older sellers and/or were commercial loans with shorter terms, adjustable rates and were bothering me for my financials every year like I was a child.

I am even leaving my resi's with their sweet fixed rates and long-terms that are under 5% alone, but still punching a monster at 6.5% in the face every month at $7k/mo extra.  But I already have reserves and a fully funded acquisition acct (dry powder as @Jerry W. likes to say).

$7k/mo to some is a rounding error.  Everybody is different. What is $500/mo to you @Matt Romano?  I'd hate to see you accelerate a 4% mortgage, yet miss an opportunity.  If you have reserves and a funded acquisition acct already and no other consumer debt, accelerate all you want.  

What is the rate and term of the loan you are paying the extra $500/mo on? Do you have cc's, student loans, car payment, etc?  Pay those first for sure.