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Further
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First Steps to Starting a Business - Hamoon Arbabi
Q: I'm ready to start my business. What do I do now? A: OK, you've got your business idea. You're fired up—ready to quit the rat race and be your own boss. What do you do now? The first thing you need to do is decide on the goals for your business....
Repair Your Credit...The Right Way! - Dan Farrell
Copyright 2005 MHG Consulting How to Repair a Bad Credit Rating…The Right Way! If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished. Once you have a bad...
Discover The Secret To Earning Royalty Income Just Like Famous Rock Stars! - David L Feinstein
Rock Stars have it made. They get an inspiration, write a song, get it produced, and then earn checks on their inspiration (OK, some perspiration too …) for the rest of their lives. I know most of us never think past what they look like and what...
Your Financial Future - Ioannis Evangelos Haramis
"Wonder is the foundation of all philosophy, inquiry the progress, ignorance the end!" Michel de Montaigne (1533 - 1592) Financial independence is one of the most important goals for most people. Yet people sometimes miss the opportunity to become...
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How Long Your Mortgage Runs Determines How Much You Pay
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Written By:
W. Troy Swezey
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The first thing most of us think about when the time comes to take out a mortgage on a new home is the interest rate.
That’s both perfectly natural and very sensible. The rate of interest we pay can make an immense difference – a difference amounting to tens of thousands of dollars – in what the actual cost of our house ultimately turns out to be.
Still, interest rates are far from the only thing worth thinking about where mortgages are concerned. Other important variables need to be considered too. One is the question of whether to take a fixed interest rate of choose from among the many kinds of variable-rate mortgages that have been created over the years to meet the differing needs of different buyers.
Another – and a very important one – is the rather basic question of how long you want your mortgage to run. Even with fixed-rate mortgages, a broad spectrum of time spans is commonly available. In most cases the extremes are 15 years on the short side, 30 years on the long.
Some years ago, when a famous scientist was asked to name the most powerful force in the universe, he answered “the power of compound interest.” This reply suggests that he was knowledgeable not only about the laws of nature but the principles of finance – about what happens to even a modest sum of money when it continues to accumulate interest year after year after year.
Even at a modest rate of interest, money in a savings account can double within ten years or less. The amount actually paid for a house with a $100,000 mortgage can turn out to be several hundred thousand dollars if the mortgage runs for 30 years.
When you opt for a mortgage of only 15 or 20 yeas, on the other hand, you chop off much of the growth in your total obligation. But to do that without reducing the initial size of your mortgage, you have to make a bigger payment every month. As in most of life’s major decisions, the stakes are high and the - continued below ...
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trade-offs require careful consideration. Above all, they require a careful examination of your resources, your aspirations, and your personal priorities.
Someone who’s willing to make near-term lifestyle sacrifices for the sake of long-term gains probably will prefer a shorter mortgage. If your motto is “eat, drink and be merry,” on the other hand, the idea of squeezing extra money out of your budget for the sake of a bigger house payment won’t have much appeal.
If you’re attracted by a shorter, faster mortgage and think you might be able to handle one, ask your real estate agent to show you just how much long-term savings such an approach can make possible. Chances are you’ll be astonished by the size of the number.
Remember, though, that a 15-year or 20-year mortgage, by increasing your monthly obligations now and for years to come, can sharply reduce your flexibility.
One good approach is to take a 30-year mortgage but try to discipline yourself to make one extra monthly payment each year. If you can stick to such a regimen, ultimately it will yield the benefits of a 15-year mortgage. Meanwhile, you’ll be less strapped if changing circumstances reduce your ability to make monthly payments.
What’s really important is making yourself aware of how many different options you have and gathering detailed information about the ones that interest you most. A good real estate broker can be your key to all the information you could possibly need.
W. Troy Swezey is the author of “HOW LONG YOUR MORTGAGE RUNS DETERMINES HOW MUCH YOU PAY." As a Realtor at Century 21 Paul & Associates, he has helped many individuals with their real estate needs. Visit his web site to download his free e-book, “REAL ESTATE SECRETS EXPOSED.” http://www.TroyIsMyRealtor.com or mail to: TroyC21@usa.net
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Sitting On The Back Porch - Cathy Bryant
Sitting On The Back Porch by Cathy Bryant Copyright 2002 http://www.homebizjunction.com Yep, that's where I wrote this article - sitting on the back porch. Well, that's probably inaccurate; actually, the idea for this article came to me while I...
Home Business Tips - Peter Watts
If your Online Business success was 100% guaranteed, wouldn't you jump at the chance to start your own money making online business? Of course you would! And now there is a guaranteed way you can start your very own money-making internet business...
Proven Steps to Start and Grow Your Own Profitable Online Business - Ladan Lashkari
Are you serious about the success of your online business? Do you want to know how to make REAL money on the Internet? Then you need to know how to successfully start and grow your online business. Thousands of people start an online business each...
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