Pay off a 15 year mortgage loan in less than 10 years

By Valley West Mortgage 9 years agoNo Comments
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Las Vegas – Record Setting rates reported by CNN MONEY

CNN Money reports that the average 30 year fixed mortgage fell to 3.94%. These rates compare to the record setting rates we saw in early October. At the same time, the 15 year fixed mortgage fell to 3.21%, and the Five-year adjustable rate mortgages also plumbed new depths, hitting 2.86% for the week. This does not come as a surprise to many of our sites visitors that have been keeping up with the recent postings we have featured.

Mortgages are a tough thing to wrap a mind around. It should be as easy as saying “today’s rate is this, that’s what you get.” Instead, there are scenario’s that need to be examined, requirements to be met and money to be saved. With the national average falling to 3.94%, things might get a little easier. Freddie Mac’s chief economist, Frank Nothaft, said that these rates will more than likely stick around until at least mid-2012. Valley West Mortgagewants to help our readers save money the best that they can. SO here is a tip.

Les Christie of CNN MONEY reports that “The low rates can translate into big savings for home buyers. Five years ago, a home buyer would have been lucky to land a 5% rate on a 15-year loan. On a $200,000 mortgage, that would have meant the borrower would have paid $1,582 a month. Should a borrower land a 3.2% rate on a $200,000 loan now, the monthly mortgage payment would come to $1,400 — a savings of $182 a month.” While this is true, I would like to tate a fact that could save your money money and time in the long run. Lets say that the previous situation applies to your situation. You were paying 5% on a $200,000 mortgage and are now at 3.2%. You are saving $182 a month. Your first initial thought would probably be that you now have extra money to spend on groceries, bills or gas. But here is an idea. If you took that $182 and made a separate “PRINCIPLE” payment, you could actually pay off your loan in less than 9 years. Now let’s be clear about this. You would have to write the check to Mortgage Company that you are paying and clearly state on the check, that the check is to be paid to the PRINCIPLE on your mortgage.

While it’s not a bad thing to want to pocket the money, being smart about paying off your loans and interets sure does help. See our recent posting about Mortgage Rates at their lowest, arguably to get a better understanding on how people claiming “RATES NOW” are lower then the same exact rates “THEN”.

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