Your mortgage: you only think about it once a month (if
you’re on autopay, maybe not even that often). Why worry about it? If it ain’t
broke, don’t fix it, right?
Wrong!
Like all aspects of your big-picture financial planning,
keeping an eye on that mortgage can be an extra wealth-building move. I can
point to three reasons why re-evaluating your mortgage could pay dividends:
Down, Down, Down…
Ok, with interest rates continually making headlines, this
one might be a no-brainer. But some folks don’t realize just how attainable
significant savings may be: a drop of just a single percentage point in
themortgage rate can make a gigantic difference. A general rule of thumb is
that if you can lower your interest rate by a percent or more, it usually makes
sense to refinance. It’s certainly worth looking into.
Pay More Sooner (Build Wealth Quicker)
Nobody wants to part with more hard-earned cash than
necessary, but extra money out now can wind up saving a lot of greenbacks
later. Making just one extra payment a year will have you owning your home free
and clear sooner – whereupon those payment dollars become yours!
Sound too painful? It needn’t. See if you can set up
bi-weekly payments of half your monthly mortgage amount. You'll be making 26
payments annually: the equivalent of 13 monthly payments! Confirm with your
lender that the extra payments go toward principal.
Eye That Equity
If you’ve got a PMI payment, you know that extra insurance
doesn’t come cheap. So why make the extra payment a single month longer than
necessary? By law, your lender is required to stop charging you PMI after you
accrue 22% equity in your home. But in many cases, once you hit 20% equity,
simply writing a letter to your lender will prompt them to allow you to stop
paying PMI then and there.
For most of us, our home in Evansville is one of the largest
investments we’ll ever make. Got a real estate question? I’m here all the time
to supply you with friendly help and advice! You can reach me on my cell phone
812-499-9234 or by email Rolando@RolandoTrentini.com
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