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You are Here My Baby 1on1 » Pregnancy-and-family-planning » Paying Your home off Faster
Paying Your home off Faster
The current mortgage market favors fixed loans. In the past people opted to get into adjustable rate loans because they could get a lower monthly payment. If your loan is going to adjust you may be able to take advantage of the low fixed rates and start your planning to get your home paid off. Fixed loans that you are paying off principal and interest each month are a great way to have security and pay your mortgage off. There are many different terms you can choose based on when you want to have your loan paid off and what you afford monthly. A short term fixed loan is the fastest way to be a true home owner. Most people do not feel comfortable being obligated to make the higher payment on a 10 year fixed loan so they opt for a 30 year mortgage. What you may not know is that you can pay off your loan faster than 30 years simply by adding extra money on top of what you owe each month. Depending on how much extra you pay you can drop anywhere from 1 to 14 years off the length of your loan. The benefit is that you save in interest for every month you arent borrowing money. Paying extra can save you tens of thousands, sometimes even hundreds of thousands of dollars in interest depending on how big your loan amount is. As an example if you looked at your monthly payment on a 15 year fixed and then your payment on a 30 year fixed your payment is clearly higher on the 15 year fixed because the term of your loan is half as long. If you can afford the 15 year payment but arent sure you want to be obligated to paying that much you can take a 30 year fixed loan and still pay the same as you would as with a 15 year fixed loan. The end result is true homeownership in about 16 years versus the 15 years but with the flexibility to pay the 30 year payment if need be. If you can be disciplined and allocate extra money each month you will save thousands in interest payments. This solution is also great if you just miss qualifying for a 15 year fixed but have extra money to pay your house off. Fixed loans are great and you can get really great rates right now but if you have been in your current mortgage even if it is fixed at a higher percentage rate for more than five years you have already paid a ton of your interest off and the next few years you will be paying. If you are in an interest only loan or an adjustable rate loan and your goal is to own your home now is the time to get a low fixed rate mortgage. -->
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Article by: MortgageWizard |
Total views: 377 |
Word Count: 506 About the AuthorThe 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.
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