Why You Should Not Get Hung Up on the Interest Rates!!

This is what a mortgage can do for you!

AND Why you shouldn't get hung up on the interest rate!

Let me show you the bottom line or the total dollar amount you will pay when paying a mortgage and paying rent and what the benefits of a mortgage are:

Let's say John bought a home and has a $75,000 mortgage @ 10% interest for 30 years on his home with a payment of $750.00 per month. John's friend Bill is renting a house, but he is paying $750.00 per month in rent with no interest (I am using these numbers for illustration purposes). Now, it's a funny thing, but both men live in their homes for the full 30 years and guess how much money both paid out in that 30 years?

Do you think John would have paid more money in the 30 years then Bill did because John was paying a mortgage? The answer is no! Thirty years equal 360 months of payments and if you multiply 360 X $750.00 you get $270,000.00. That means both men paid the same amount of money over the 30 years with one BIG difference! John now OWNS his home but Bill is still paying rent and does not own the home. In fact Bill's rent more then likely paid the mortgage off for the owner of the house he is renting from.

As you can see, even though John was paying a mortgage payment of $750.00 per month, the total amount of dollars paid in the same time period of 30 years is the same. Now Bill has nothing to show for all the rent payments he made except for 360 rent receipts. So you can see how the interest rate does not change the total amount paid over the time period because $750.00 per month is $750.00 per month. No matter what you call it a mortgage payment or rent payment, the bottom line is the same.

So whatever type of mortgage you can qualify for has to suit the payment you can afford and are comfortable with. Of course; the amount of money borrowed, the interest rate, and the term or years the money is borrowed is what will determine your payment.

So the bottom line is: if you get a mortgage that is comfortable for you payment wise... let's say equal to what you were paying for rent, the major thing you changed is the fact that you own the home now and you are not just paying rent or paying off someone else's mortgage.

You know the bottom line is we all have to live somewhere and we have to pay for that living space, so why not own what we have to pay for anyway. And don't get hung up on the interest rate to where it stops you from buying your home... just make the payment amount work for you.

Now let me show you what you can do with a mortgage payment that you can't do with a rent payment.

Stay with me now because it is going to get really good! As you have seen from our example above, the total amount of money paid over the 30 years or 360 payments for the mortgage and rent came out to be the same dollar amount in the end. However, did you know you could change the bottom line or the dollar amount paid when you are making a mortgage payment as well as the amount of time it will take to pay the money back?

A mortgage is calculated by the amount of money borrowed, the interest rate, and the amount of time it will take to pay it back. This calculation is called an amortization schedule. I am going to show you an amortization schedule for a mortgage now and show you how to change the total amount of money you will pay and the amount of time it will take to pay it back! Lets say you get a mortgage for $75,000@12% for 30yrs This is what the amortization schedule will look like:

Date -- Payment -- Interest -- Principle -Balance 1-2/21/04 $771.46 $750.00 $21.46 $74,978.54 2-3/21/04 $771.46 $749.79 $21.67 $74,956.87 3-4/21/04 $771.46 $749.57 $21.89 $74,934.98 4-5/21/04 $771.46 $749.35 $22.11 $74,912.87 5-6/21/04 $771.46 $749.13 $22.33 $74,890.54 6-7/21/04 $771.46 $748.91 $22.55 $74,867.99 7-8/21/04 $771.46 $748.68 $22.78 $74,845.21 8-9/21/04 $771.46 $748.45 $23.01 $74,822.20 9-10/21/04 $771.46 $748.22 $23.24 $74,798.96 10-11/21/04 $771.46 $747.99 $23.47 $74,775.49 11-12/21/04 $771.46 $747.75 $23.71 $74,751.78 Totals $8,486.06 $8,237.84 $248.22

As you can see, when you make a payment on a mortgage a large part of the money goes to interest with a small part of the money going to principle. You will notice the principle balance increases with each payment and the interest balance decreases with each payment, but this happens very slow.

Now, let me show you what control you have over a mortgage:

As you can see; in the 11 months of payments we made on this mortgage, we paid $8,237.84 in interest and $248.22 in principle! This is what YOU can do. When you looked at this schedule after your closing, you noticed the figures. If you were to add the total of the principle for the 11 months of payments ($248.22) to your first mortgage payment and told the lender you wanted the extra money to go towards the principle this is what would happen for you: you would reduce your mortgage by 11 months and save $8,237.84 in interest payments! This happens whenever you make extra payments on a mortgage, no matter how much or little you pay. You always have to specify that this extra payment is designated to go towards the principle and this works best if you start right away in the very beginning of the mortgage!

This means that in your first month you have already changed the total amount of money and time it will take to pay back your loan. The more you can do this, the less money you pay in interest and less time it takes to pay the money back.

The mortgage has to have no pre-payment penalties. That happens to be the majority of mortgages that we see today. However, ask and make sure so that you have no surprises later. This is just one simple thing you can do with a mortgage which gives you control of the bottom line as far as money paid back and the time it takes to pay it back.

Let us help you get what you want and need to purchase that first new home or investment property. We look forward to helping you and working with you to help you meet your goals!

Visit us today at: http://www.easymoney-123.com

I have been doing real estate deals for over 20 yrs! I enjoy doing creative transactions with mortgage money and the actual real estate. There is always a way to make a deal work!

Visit me at my web site: http://www.easymoney-123.com and let's get creative to make your deal work for you!

---

Real Estate Tip: Escrow Accounts -- Do You Really Need Them?

If you have a mortgage on your property, whether it's... Read More

Getting The Best Home Equity Loan

Owing to the popularity of home equity loans, there are... Read More

Home Mortgages: Think Before You Borrow

In today's overheated housing market, lenders are making it easier... Read More

A Guide to UK Buy to Let Mortgages

Essentially there is little difference between the process that one... Read More

Finding the Best Homeowner Loans for Your Money

Looking for the best homeowner loans can be stressful, especially... Read More

First Time Buyers Fail To Shop Around

Almost two thirds of first time buyers accept the first... Read More

Bad Credit Remortgage Loan: When Bad Credit Plays Mischief With Your Mortgage

Financial difficulties are married to bad credit. It is a... Read More

How to Buy a Home Without a Down Payment

Mortgage rates are rising and it's becoming more difficult for... Read More

40-Year Mortgages: An Alternative to Interest-only Loans?

Interest-only loans are quickly becoming a mainstream loan product. Borrowers... Read More

5 Home Buying Essentials

Purchasing a home involves certain important, even essential, steps that... Read More

The Mortgage Loan Application Online - Save Time & Money By Applying On The Internet

"You can save time and money by applying for a... Read More

Adjustable Rate Mortgages - Understand the Benefits Compared to a Fixed Rate Mortgage

Adjustable rate mortgages can be very tempting to home buyers,... Read More

Mortgage Broker or Assassin? A Banker Who Offers You This Loan May be Trying to Kill You!

What if a banker or mortgage broker told you he's... Read More

Home Equity Loan ? Still a Better Idea Than a 401(K) Loan

Anyone who borrows money is always looking for the cheapest... Read More

Kings Bay Georgia Mortgage Information

When choosing the right mortgage company for your home purchase... Read More

What On Earth are Home Equity Loans?

Home equity loans are one of the most common types... Read More

Apply For Home Mortgage Loan Online With Bad Credit - Things To Consider

So, you've found the perfect home. You've already decided where... Read More

Recent Bankruptcy? Its Not Impossible to Obtain a Home Loan

Because the new bankruptcy laws go into effect on October... Read More

Refinancing Your House - How to Know Whether to Refinance or get a Second Mortgage

Refinancing your house's mortgage is not the same thing as... Read More

Types Of Home Equity Loans

There are two broad types of home equity loans:Term loans:... Read More

Imagine Cutting Over $8,000 Off Your Mortgage This Year

I once helped a customer cut over $700 off his... Read More

Stated Income Mortgage Loan - Get Approved Online

A stated income or no doc mortgage loan allows individuals... Read More

Seller Financing

Although any loan used for buying real estate is strictly... Read More

Home Loans -- The Hot New Product? The 30-year, Fixed-rate Mortgage

In recent years, the mortgage industry has introduced dozens of... Read More

Credit Problems? With a Subprime Mortgage Lender, Poor Credit is Not a Problem

Have you been turned down for a home loan recently... Read More

Adjustable vs Fixed Rate Mortgages

Mortgage rates can either be fixed for the duration of... Read More

What Is The Best Deal For A Mortgage?

Few of us invest the time and effort into researching... Read More

Online Home Equity Loans: A Basic Glossary

Home equity loans can be a great idea for individuals... Read More

Buying a Home With Bad Credit - Tips on Finding the Right Broker or Lender

You can buy a home with a bad credit record;... Read More

Tips On New York Mortgage Refinance Loan

Many homeowners want to know if it worth taking a... Read More

Home Mortgage Loan Refinance ? Benefits To Refinancing Your House Online

Here are some of the benefits to doing your home... Read More

Thinking About Refinancing Your Loan?

Refinancing your home or property is a big decision that... Read More

New Home Loan - 3 Tips To Speed Up The Mortgage Loan Approval Process

Imagine this: you've found the perfect house, and feel lucky... Read More