Using A 15 Year Mortgage In Your Personal Finance Plan

Because of economic conditions, personal finance plans are changing, including home financing. A more practical view now is to see your home as a long term place to live, while thinking ahead to prepare for a financially secure future.

When buying or refinancing a home, most people will take the path of low payment over a plan to eventually be mortgage free. The idea of owning a home free and clear of any mortgage may be a far off idea to many people, but it’s only a matter of time, 15 years, or maybe even less.

A 15 year fixed rate mortgage can provide a realistic goal of being mortgage free, while saving thousands of dollars on interest payments, instead of a 30 year mortgage. For example, on a 0,000 loan, a 15 year mortgage could save as much as 0,000 over the life of the loan when compared to a 30 year mortgage term.

There has been an ongoing debate about the pros and cons of paying off a mortgage. Behind the argument for not paying off your mortgage is the reasoning that you could invest the extra money and earn a higher return, while keeping your money more liquid. That may have been a good reason in the past, but the rate of return on investing is questionable, compared to the fact that every dollar paid to reduce a mortgage balance provides a guaranteed return equal to the interest rate.

Another debating point about keeping a mortgage has been the tax deduction benefit. In order to get an accurate picture of the tax benefit, compare the standard deduction allowed to itemized deductions with mortgage interest. If you paid ,000 in mortgage interest for the year and received a ,000 net tax write off, is that a good reason to prolong your mortgage?   

What are the benefits of a 15 year mortgage?

Provides a fixed term strategy to eliminate your monthly mortgage expense. Incorporates the retirement of your mortgage into your overall retirement plan. Long term investment that guarantees a rate of return by reducing your debt. A future with less financial stress and the security of really owning your home. Saving a large amount of interest expense on a 15 year term instead of 30 years.

A personal finance plan of living without a house payment is attainable. If you can afford a 15 year mortgage, you set a timetable to one day enjoy the benefits owning your home free and clear. You also have the option of shaving a few years off the term by paying a little extra towards the principal balance each month.

Having to deal with angry and upset customers is by far one of the worst responsibilities we must face on a day to day basis in the world of sales and business. However, this responsibility, like so many others we must face on a daily basis, just comes with the territory.

Customers become angry for all sorts of reasons. Some are legitimate reasons.  Some are not. In any event it is our job to defuse the situation. Here are a few tips on how you can calm your customer down and put them at ease. (more…)

If you own a home, you know mortgage products have moved beyond the basic 30 year fixed option. Reverse mortgages are one such product and here is an overview.

An Overview of Reverse Mortgages

A typical mortgage is created when a lender provides you with a lump sum amount of cash to purchase real estate. In consideration of this, you agree to repay the mortgage on a monthly basis for a defined time period at a particular interest rate. The length of the repayment period and interest rate, whether fixed or adjustable, set the monthly payment amount.

A reverse mortgage works in a similar way, but backwards. It is a fact that the baby boomer generation is moving into their retirement years. A high percentage own homes with significant amounts of equity in them. The problem, of course, is equity is a fixed asset, to wit, you can’t see it in your bank account. Traditionally, the best way to turn this hard asset into cash was to sell the property and move down to something cheaper. You then pocketed the difference in the form of cash.
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Getting out of debt can be a long, drawn out process. If you spent years wrestling with financial problems, the solution will not come to you overnight. It can take months, even years to unravel debt difficulties but it can be done. You have some options to help you get started; let’s take a look at four of them:

Credit Counseling. Credit counseling companies are vying for your business. This can be a good option as you shop around to find the best plan out there, but bad as you learn that many companies will charge exorbitant fees or do work for you that you can do yourself. Some government agencies and nonprofit firms provide credit counseling too. For little or no money you may be able to find a professional who can help you navigate through your debt dilemma.

Debt Consolidation Loan. Replace your high interest credit cards with one, low interest rate credit card. You could also see if a lending institution will give you a debt consolidation loan. However, you may have to pay for an application fee, whereas with a credit card you would not.

Home Refinancing. Even with rising interest rates, refinancing your mortgage may make sense and allow for you to save hundreds of dollars per month on mortgage payments. With the monies saved with a new, lower mortgage payment you could use your savings to pay off your other debt.

Cash Out. Alternately to home refinancing, you may have enough equity in your home to cash out and pay off your debt. Importantly, although credit card debt is not tax deductible, a home equity loan is. Ultimately, you can reduce your debt as well as reduce your tax obligation by cashing out.

You have some viable solutions to help you reduce your debt. Learn all you can about each option and select the plan that is right for you.

Evaluate Your Customer

When a customer walks into your office, don’t sell them the first product that comes to mind. Sit them down and evaluate their needs, than sell them the products that meet their needs.

I once worked with a guy in the banking industry, who was one of the best at explaining the benefits and features of our products, the only problem was, he was spending so much of his time explaining, but never selling anything. (more…)