TIME TO REDUCE THE TERM OF YOUR MORTGAGE

  How do you feel about paying on your mortgage until you are old as Methuselah?

 

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  Maybe you hadn't thought about it.  You have always been paying for where you live-first rent, then a house payment and if you bought your house pre-2008, you may have refinanced to get a lower rate while your kids went to college or took some cash out of the ole homestead to pay off some debt.  None of which is bad. That was then, this is now and things are looking up.  Employment is improving, homes are once again appreciating, and best of all interest rates are still low.

  So perhaps there is a reason to look more than a day ahead-let's say, look into that crystal ball-fifteen, twenty years into the future.

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What do you see?  Sandy beaches and Pina Coladas?  

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Or may you were thinking you would prefer to travel the world...

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 Or maybe just not having to make a mortgage payment floats your boat.

                                                                lazygamer.netI think I said boat...well...you get the idea.  Whatever you see yourself doing in fifteen or twenty years, it might be easier if your house was paid off.  This may require some sacrifice on your part.  A fifteen year payment is going to be higher than a thirty year payment-we are trying to cram the same amount of money into a smaller increment of time. Obviously, the debt ratios have to work and you have to feel comfortable that you can make the payment. Perhaps reducing to a twenty year payoff is more comfortable.  Let's work some numbers:

Let's say you owe $123,000 on your 30 year mortgage.  You have had your mortgage for five years-so you still have 25 years left to pay on it. Your interest rates is 4.75%. 
Interest left to pay: $109,740

Let's drop that mortgage to a fifteen year mortgage at 4.0%
Interest that will be paid over the life of the loan: $41, 429  YOWZA!

  That is $68,311 in savings-money back in your pocket.  The monthly payment will be right around $942 principal and interest-which is significantly higher than your 30 year loan which is at about $652.  But...if you have the extra $310 per month it makes good sense to keep your money and be free of house payments sooner.  Free to take up hang gliding in Belize.

                 

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Or tap dancing in Poukipsee.

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Whatever floats your boat.