Redeeming the mortgage means advancing the payment of the property's mortgage loan. This payment in advance can be total or partial, and in the latter case, it is possible to reduce the instalment or the deadlines. The best time and way to do it not only depends on liquidity. It is essential to consider some aspects before deciding....continue reading "Redeem the Mortgage: When is it Convenient?"
Changing housing policy benefits economy at a local level
The housing market predicts local economic conditions. There is a correlation between the percentage of underwater mortgages in a state (i.e., mortgages on which the homeowner owes more than his property is worth) and the unemployment rate.
“There’s no environmental review to conduct or long-delay in actually getting this into motion; underwater consumers who want to knock a few hundred dollars off their mortgages are well-incentivized to initiate, carry out and make sure this gets completed themselves. It outsources much of the bureaucratic requirements to those consumers who stand to benefit” - Mike Konczal.
A 15 or 30-year mortgage loan is a tough decision
When financing a house, it is essential to analyze what sort of mortgage adjusts to your necessities.
"Fifteen-year mortgage rates certainly look enticing these days, and the idea of owning a home, debt-free, in less time than it takes to raise a child, sounds grand. So what’s the catch?" asks Vickie Elmer in The New York Times.
Before choosing a 15 or 30-year loan, calculate how much money there will be left aside your monthly mortgage fee. Is it enough for you to live on?
Let's have a look at the example from The New York Times:
"On a $300,000 loan, for example, you would pay about $1,475 a month for principal and interest over 30 years, versus $2,145 over 15 years. That assumes a 4.25 percent rate on the longer loan and 3.5 percent on the shorter one.
You would save about $145,000 in interest payments over the life of a 15-year mortgage and build up equity in the home faster [...]. In the first year, principal would be reduced by $15,000, versus about $5,000 on a 30-year loan".
The more you can reduce years in a mortgage the better. But, nonetheless, if you are worried about job security you should opt for a 30-year mortgage. Keep in mind that spreading out the loan length increases the final price of a house.