Financing money allows consumers an investors to leverage there cash flow to acquire more assets. Proper planning will allow you to end up with owning your home free and clear.
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.
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?
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.
With accelerated payments you can save tons of interest on the life of your loan.
This solution is also great if you just miss qualifying for a 15 year fixed but have extra money to pay your house off.
If you are in an interest only loan but your goal is to own your home and have no mortgage now is a great time to get a low fixed rate and start paying it off. If you have been in a fixed rate mortgage for more than 6 years you may want to consult a professional before touching your loan because mortgages are frontloaded with interest and if you have already paid more than 5 years of payment heavily weighted in interest it may not make sense to start all over again no matter how good the rate is.
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