The first mistake. This happens much too often.
1. Not accurately determining the term of loan that would be best for you!
30 years… 20 years… 15 years… 10 years…? What to do?
The real trick is trying to balance the scales between qualifying and long-term total cost. It can be difficult and sometimes it can be an emotional decision.
People say: "I want to pay this off as soon as possible and yet keep my monthly payments low". or "I want a 30 year loan, that way I will get the lowest monthly payment". Most people fail to ask the most important question what is the...
What type of loan will be the LEAST expensive in the short and long run?
That’s right! Do not choose a loan until you know how much total interest you will be paying!
Let’s look at an example: It amazing how much interest you pay on your mortgage over the life of the loan. For example, a 30-year loan of $250,000 at 6.75% will cost you a monthly payment of $1,621.50. That sounds OK doesn’t it? However, when you read the fine print you will find that you will have to pay back over $583,700! WOW! That sounds unbelievable, but it is true!
Did you know that if you make your payments one at a time (on time), that it will take 22 years to pay off ˝ of the balance. That’s right you would still owe $125,000 in 22 years!
Let’s look at another option:
If you were to set up a prepayment fund and once a year, you paid one extra PITI payment on your principal balance, after 22 years your balance would be ZERO instead of $125,000.
You would save over $136,000 and…your home would be paid off in 22 years!
This is why some people retire with a nest egg and some with a goose egg, which means they must rely on someone else to take care of them for the rest of their lives! Knowledge is the difference! The choice is yours! Do you think your banker is going to tell you about this option? No way!
The bank wants to make the extra $136,000 in interest!
What about 20 years… 15 years…the numbers just keep getting better!
How would you like to be debt free in 10 years? There are many options available let us help you!
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