Question: If I've got a little extra money that I'd like to use responsibly to pay off one of my debts, which is the better one to put it towards: Should I pay off my car loan early or my mortgage? Ahhh … the old “which of my debts do I pay down first” debate … We tend to carry a lot of them in our society. According to a 2017 report from GoBankingRates, the top three forms of debt for most people are their mortgage (65%), credit cards (50%), and auto loans (32%). Usually questions like this are a no-brainer. Simply look to your loans with the highest interest rate and pay those off … [Read more...] about Should I Pay Off My Car Loan Early or My Mortgage?
At the beginning of every new year, one of the first things I do with our finances is to take a hard look at our budget and see where we can get the most bang for our buck. At first this usually involves doing the normal thing that most people do - taking a look at our bills and seeing where we can shave some expenses. But there’s something else I like to do with the extra money in our budget that I feel is just as important as cutting corners on expenses. I like to take a look at where we can best grow it! There are lots of good options for what to do with extra money if you’ve got … [Read more...] about What To Do With Extra Money In Your Budget – 3 Good Choices
Another one bites the dust …. It’s getting to be a sad site walking around our little neighborhood. All around us there are houses that have slipped into foreclosure. It’s obvious when it happens. First the house gets really quiet. Then the yard starts turning brown and overgrown. And then it becomes official - the bank comes along and posts a legal notice in the window letting everyone know that the people who used to live their let their conventional home loan slip into default. … [Read more...] about The Conventional Home Loan – Don’t Mess It Up This Time Around
Are you looking to buy a house? The purchase of your home may be the largest expenditure you will have in your life. Therefore, applying for a home loan is a process that you should not take lightly. The cost of a house is just your beginning expense. Points and the interest you must pay for a mortgage during the term of your loan will be much more than the price of the house. That’s why paying attention to the details of your home loan may turn out to be more important than the sale price of the home. To get the most out of your mortgage, consider the following: … [Read more...] about Dos and Don’ts in Mortgage
As if understanding all the basics of a mortgage like interest rates, amortization, escrow, and PMI weren’t complex enough, there comes one more product that really convolutes the entire process even further: points. Like all of the items mentioned above, knowing whether or not to purchase points can have significant long-term implications on how much money you may actually save or lose throughout the life of the mortgage. This post is going to explain how all that works and I’ll even give you a Microsoft Excel worksheet to try it out yourself. … [Read more...] about Which is Better – Points or No Points on Your Mortgage?
We’ve got big news: We applied for a refinance! What’s New It’s been quite a while since I’ve updated this series. Since my last post in Chapter 3, a lot has happened - a lot of good things! … [Read more...] about Adventures in Refinancing, Chapter 4
Since my last post on refinancing, I have visited a great deal of posts and articles on the web and have learned that we have something is common: • Many of us have the same problem with trying to get a refinance. That problem is: 1) We are underwater (our house is worth less than what we still owe). In mortgage terms, our loan-to-value (LTV) ratio is above 100%. 2) We faithfully make our payments on time 3) We have no other home equity or liens against our property 4) We have private mortgage insurance (PMI) Number 4 is the real kicker. In most instances, this is where all the … [Read more...] about Adventures in Refinancing, Chapter 3
In Part 1, we introduced the question of whether it is better to payoff your mortgage or simply invest the money. We also walked through an example that demonstrates how your mortgage is really the same thing as an investment where you earn the same rate of return as your mortgage interest rate. Back to the Question: So after the previous example, you’d probably think that that was the answer and we’re all done. Unfortunately, it’s not that simple. There are two main variables that change the circumstances: … [Read more...] about Which is Better – Paying Off Your Mortgage or Investing the Money? – Part 2
It’s one of the most widely asked, light-hearted questions among people: • “If you won the lottery, what would you do with the money?” There’s the usual responses like buying a fancy new car, going on a shopping-spree, taking an exotic vacation, that thing you always wanted, etc. But after all you filter out all the fun responses, most people come to two very sensible responses: • “I’d use the money to payoff my house” • “I’d invest the money” Although not all of us will be winning the lottery anytime soon, we make much smaller-scale decisions along these lines all the time. For … [Read more...] about Which is Better – Paying Off Your Mortgage or Investing the Money? – Part 1
My quest to get our mortgage refinanced started off with great promise – like a hot air balloon up and off into the sky. But … it didn’t take long for it to come crashing back down onto the ground. Here are my experiences this week: Local Mortgage Company: The first place I called was a local mortgage company that was recommended to me by my neighbor. I have a very strategic reason for choosing this company: • My neighbor and I have the same exact model house. Our neighborhood is a new-build subdivision built around 8 years ago. My neighbor is also getting a home appraisal right now … [Read more...] about Adventures in Refinancing, Chapter 2