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Homeownership is one the American dreams. It is easy to mismanage your planb and end up never paying off your home. With the proper plan the ones who want to end up with no payment can.
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.
If your main goal is to have no mortgage by the time you retire there are many products that you can look at. There are 10 year, 15 year, 20 year, and 30 year fixed loans.
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.
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.
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.
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.
If your main goal is to have no mortgage by the time you retire there are many products that you can look at. There are 10 year, 15 year, 20 year, and 30 year fixed loans.
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.
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.
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.
About the Author:
The possibility 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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