To all my blog readers and subscribers, I always try to bring to you things of value and substance whether or not it came from me or another colleague in the real estate industry.
This is yet another one of those instances, Gregg Knight, a colleague out of Huntington Beach, CA has some great and practical advise that I think anyone who owns a home and is considering refinancing your home or a prospective home buyer trying to decide what type of mortgage to choose would benefit from.
To your success,
John Hrisco of John Hrisco and Associates
Why would you agree on a 30 year mortgage with 30% down when you could pay off your home using a 15 year loan and save $545,760 using the same 30% and employing a better strategy for you and your family? I'll tell you why.... the loan officer you were working with didn't have the training that the top 1% do.
Borrow Smart/ Repay Smart
Whether you are purchasing your first home or refinancing your existing mortgage there are some very important questions that need to be answered. Questions such as: What are your goals for your home? Do you plan on retiring in this home or selling it or renting it out in the next 5-7 years? How much of an income tax refund do you receive from Uncle Sam each April? How much other debt such as cars and credit cards do you have and what are the monthly payments associated to that debt? The answers to these questions should determine the type of loan you choose.
Here’s an example how a couple decided to pay off your home using a 15 year loan and save $545,760 simply by answering the above questions. More importantly they did it without working overtime or changing their lifestyle. Initially their objective was to get the lowest 30 year fixed interest rate that was possible and possibly pay off their other monthly debt. They currently owed $380,000 with a 30 year fixed interest rate of 5.375% on their $600,000 home. The monthly payment on the mortgage equaled $2128 per month. They owed $37,000 in other debt such as credit cards and a used car loan with payments of $484 per month. They receive about $5040 every April from Uncle Sam in form of an income tax refund. In total, they were paying $2612 per month on $417,000 of total monthly debt and were unnecessarily over paying Uncle Sam $420 per month ($5040/12= $420 per month). This equaled $3032 per month.
After going through a “Borrow Smart/ Repay Smart” analysis and learning that they wished to retire in this home and pay it off as quickly as possible, here is what was structured. Obtained a new 15 year fixed loan at 3.75% with a monthly payment of $3032, the same monthly payments they were making on their total debt. They also adjusted their W-4 deductions with their employer so they were no longer overpaying Uncle Sam $420 per month. In conclusion, the couple could now realize their dreams of ‘owning’ their home in as little as 15 years without having to adjust their income or lifestyle. It was just a matter of adjusting where and how the payments were being allocated. In reality, the couple saved $220,000 on their mortgage payments alone but in essence they saved $545,760 in total payments. ($3032 x 30 years= $1,091,520 vs $3032 x 15 years= $545,700)
Without going through these discovery questions, the probability of someone unnecessarily and unknowingly wasting thousands if not hundreds of thousands of dollars over the next 15-20 years and beyond are very high. If it's time for you to know your options and pay off your home using a 15 year loan and save $545,760, call Gregg Knight today.
The author, Gregg Knight is a retired Huntington Beach Policeman and a 13 year Mortgage Professional nnd owner of www.ApprovingSocal.com. He is dedicated to serve the Police, Fire and Educational Communities. He lives in Orange County and can be reached anytime on his cell at 714.743.9909.
John Hrisco & Associates: When experience counts, the sign you want, the agent you need. Licensed Texas Real Estate Broker #0480703, with over 13+ years experience buying & selling real estate in the D/FW Metroplex. Integrity, Professionalism, Results & Charity is our Mantra. It is how we go about our lives and our business. We undertake a specialized set of tasks and orchestrate them with uncommon skills. Whether you are buying, selling, or investing in real estate, if you are not doing business with John Hrisco & Associates, you are losing money.
servicing the Dallas/Fort Worth Metroplex: including Northeast Tarrant County, Ft. Worth, Keller, Southlake, Colleyville, Grapevine, Haslet, Trophy Club, Roanoke, Westlake, NRH & Surrounding areas
John Hrisco & Associates
4200 Heritage Trace Pkwy., Ste. 100
Ft. Worth/Keller, TX 76248