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Finance Real Estate Back to Basics, Tips For Paying Your Mortgage Down to Zero
Finance Real Estate Back to Basics, Tips For Paying Your Mortgage Down to Zero
| Back to Basics, Tips For Paying Your Mortgage Down to Zero |
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| Written by Mortgage Wizard |
| Sunday, 01 February 2009 09:58 |
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In an age where we are taught that leveraging money is the way to go. There are still some of us out there that just want to own our homes outright. If your mortgage is about to adjust and you are still in good standing but are looking for a long term financing solution you can refinance into a fixed loan that you can start paying down your principal. There are plenty of fixed products that you can refinance into such as 30 year fixed, 20 year fixed, 15 year fixed, and 10 year fixed. If your goal is to pay off your home by the time you retire this is the best option. 30 year fixed loans are great but if you pay just what you owe each month you will have a mortgage for 30 years. If you dont feel comfortable getting into a shorter term loan you can always pay more towards your loan each. Even an extra $500 will be applied directly to your principal balance. What will happen is payments on the back end of your loan will be removed which saves you interest. You will always have to pay the total principal balance on your loan but the less time it takes you to pay off the less interest you have to pay. Makes sense right? In most cases if you paid the same monthly payment as you would have on a 15 year fixed loan but had a 30 year fixed loan you would pay your home off about 16 years. This is one extra year of payments if you compare it to the 15 year fixed but that way you always have the flexibility of just making your regular payment if you need some extra money from time to time. With accelerated payments you can save tons of interest on the life of your loan. Ideally you may want a 15 year fixed but may not qualify for it. This is a great way to get around this and still achieve financial freedom. Just because rates are great does not mean you should run out and get a new loan. If you have been in a fixed loan for more than 5 years you have already paid the majority of your interest on your loan. Refinancing, even at a lower rate will cause you to restart the interest cycle again and extend your loan out another 5 years. The majority of interest in a mortgage in paid in the first 5 years. If you are in an adjustable rate mortgage or an interest only mortgage and can afford a little higher payment, now is the time to strike. Rates are great. About the Author: The idea of owning your home free and clear is very exciting. There are many loan options that can help you achieve this goal. The next step is find out what those loan options are. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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