It's the Principal of the Thing

Reblogger Michelle Carr-Crowe-Top 1% Diamond Certified Real Estate Team Sells Cupertino San Jose Homes-Just Call 408-252-8900
Real Estate Agent with Get Results Team...Just Call (408) 252-8900! CalBRE# 00901962 Lic.1985
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One of the best gifts a real estate consultant can give to a buyer client is education about how loans and amortization work-and how additional principal payments can help them reduce the term of the loan.

In other words, it helps to know if you make one full monthly payment extra per year translates in paying the loan off a few years earlier.

Original content by Patty Clark DRE# ER300941

Most people think they’ll have a house payment and a car payment for the rest of their lives but it doesn’t have to be with a plan and a little discipline. The plan is to make additional principal contributions to a fixed rate mortgage to shorten the term and save tens of thousands in interest.

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If a person were to make an additional $100 payment each month applied to principal on a $175,000 mortgage, it would shorten the loan by five years six months. If the person were to make $200 a month additional payments, it would shorten the loan by 9 years. $459 additional payment would shorten it to 15 years.

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If a person does make a decision to regularly pre-pay their mortgage, it will be their responsibility to verify that the lender is applying the money to the principal each time as opposed to being placed in the reserve account for taxes and insurance.

In today’s market, a savings account pays around 0.5% or less. Even with the low mortgage rates available, there is still a considerable savings. People who might need the funds in the near future should carefully consider this option due to the difficulty to access equity easily from one’s home.

Make your own projections using the Equity Accelerator.

 

Buy or Sell with Chris and Patty Clark              Denver, Co

Chris and Patty

If you would like for us to send you properties on a daily or weekly basis just call or email us and let us know your wants and needs. We will match them with a home you love and with monthly payments you can afford. We specialize in first time home buyers.MB logo

www.morningsidehomes.com
patty@morningsidehomes.com
Cell: 720-231-5200                       CRS,GRI,WCR,SFR,CNE, MRE

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Rainmaker
2,558,103
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

I keep educating my clients and specifically one client who is my other half always pay a little extra when you can the benefits are huge... love this illustration, might have to show it to her...Endre

Nov 17, 2016 03:45 PM #1
Rainmaker
2,513,636
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Keep on educating people because you never know who might be listening and might be converted by what you're saying

Nov 17, 2016 03:52 PM #2
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Michelle Carr-Crowe-Top 1% Diamond Certified Real Estate Team Sells Cupertino San Jose Homes-Just Call 408-252-8900
Get Results Team...Just Call (408) 252-8900! - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

God has put me here to coach and teach, I'll keep doing it!

Nov 17, 2016 04:18 PM #3
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