Lightning Quick Strategies for Crossing the Goal Line Sooner

If you’re curious as to what goal line I’m talking about, it’s time to review the advice regarding your mortgage and keeping your home.  Each mortgage payment that you make takes you closer to the finish line goal which is owning your home free and clear of any mortgages.

What are the strategies for achieving this optimal financial situation according to financial experts Clark Howard and Jane Quinn Bryant?  Here goes:

Game Plan

1.  Making bi-weekly payments reduces the amount of interest that you pay on your mortgage over the long term. 

Here is an example:  say you have a mortgage of $100,000.00, 30 yr fixed at 6.5% which is off the charts right now.  You would end up paying $127,544.00 in interest plus $100,000.00 would go towards principal equaling $227,544.00.

 By making a bi-weekly payment you chop the 127K to 97K saving yourselves 30K.  That’s more than most pay raises.

2.  Stay away from reverse mortgages. 

Their thoughts on this is that a reverse mortgage typically puts the elderly into debt with astronomical rates and fees.  The FTC has listed reverse mortgages as one of the many types of fraud.

3.  Do NOT take out home equity loans to pay down credit cards. 

You would think that makes sense, me too!  Apparently the temptation to go buy those Jimmy Choo shoes is way too high.  Huh, oh well….

4.  Last but not least, the financial gurus say to check and see if you have a prepayment penalty.

 On that note, I’d like to add that it is the most boring thing in the world to read or understand your loan docs, but trust me, you have to do it.  I know, ugh, but you’re much better off.

Hmmm, all this good advice, I wonder what Suze Orman would say about your San Diego real estate?  Maybe we’ll have a look at her thoughts on making bi-weekly mortgage payments soon:)