Paying Down Your Mortgage (Free Advice from a Lender)

If there is one question I get from current home owners the most, it would be 'What is the best way to pay down my mortgage?'. With all the choices, it can be a tough decision. I spoke with one of my preferred lenders, Mark Olson on the subject and he told me this.

We all want to save money. The obvious way is to just spend less. But sometimes you can only sustain the super-frugal lifestyle for so long before your family revolts. Your mortgage can offer you a less painful and somewhat subtler way to achieve your long-term savings goals.

Making additional monthly principal payments on your mortgage is one of the best ways to save money over the long term. Let’s look at an example, a $100,000 30 year fixed-rate loan at 5.5%:

The monthly principal and interest payment on this loan is $567.79 and as a 30 year loan it would pay off completely in 360 months. If the homeowner paid just $100 per month toward principal reduction, the loan would instead pay off in 254 months. The extra costs would therefore be 254 times $100 or $25,400. The savings however would be 106 months times the $567.79 or $60,185.74. That is a savings or almost $35,000. An extra $200 per month yields even bigger savings. The loan would pay off in 199 months and the total savings would be over $51,614.

It’s not hard to see that a larger loan balance with larger monthly (additional) principal reducing payments will lead to even bigger savings. So if you want to save more money, long-term for retirement or college funds, then look no further than your mortgage.

If you are going to purchase or refinance a home or if you have questions about your mortgage or financial matters, you can contact Mark Olson at Fairway Mortgage. His number is 972-899-5153 and his email address is marko@fairwaymc.com.

Taxing Texas home owners...VOTE NO to Prop. 2 and 3

On November 3rd, there will be Propositions 1, 2, and 3 allowing the State of Texas to start taxing Residential Homeowners. For homeowners if these laws are passed, you will be taxed by the State. We are already taxed by the County, the City, the Hospitals, and the school districts, we don’t need to be taxed by the state as well. Make sure your voice is heard!
I received a flyer from the Secretary of State, Hope Andrade, listing the Propositions that are up for election in November. I called to question them before sending this message out to my homeowner friends... PLEASE VOTE "NO" to Prop. 2 and 3 (HJR 36), unless you want to pay taxes to the State also.
Proposition 2: The proposed amendment would appear on the ballot as follows: "The constitutional amendment authorizing the legislature to provide for the ad valor em taxation of a residence homestead solely on the basis of the property's value as a residence homestead."
Proposition 3: The proposed amendment would appear on the ballot as follows: The constitutional amendment providing the uniform standards and procedures for the appraisal of property for ad valor em tax purposes."