Showing posts with label Mortgage. Show all posts
Showing posts with label Mortgage. Show all posts

Monday, March 15, 2010

How quickly should you payoff mortgage?

Q. Is there any difference from paying an extra bit each month or one full payment a year or bi-weekly payment to pay off the debt faster or easier? The problem I have with my bank is to pay bi-weekly, they want a full month’s payment in advance to set it up. Then I heard just divide the monthly payment into 12 months & pay that extra principal each month and it comes out the same?   Is that true?   Thanks for clarifying it for me

A. First, I want to commend you for trying to eliminate your mortgage debt early. Shortening the period even just a few years may not seem like much of a benefit now, but I will guarantee you that as you get closer to the end you will appreciate it much more.

As to when to make payments, Pamela, do it at your convenience. I am not much of a fan of the bi-weekly programs because most lenders charge such a hefty set-up fee. Whether you add a little bit each month or do it sporadically when you have had a profitable month, it makes little difference. Many people make a lump sum payment when they get their annual bonus or when they get the tax refund.

The important thing is to set a goal as to when you want your loan paid off. I encourage you to keep a spreadsheet to keep track of your progress. There are many calculators on the Internet that can help you get started with the right payment to achieve your timetable. .  Try the ones at the Mortgage Professor’s website.

I think that this issue is especially important to the many people who have refinanced into new 30-year loans. Maybe they were 7 years into the old loan. They may have lowered their monthly payment but added tens of thousands of dollars to their total interest bill. Instead, they should keep making the old payment and convert the interest rate savings into principal reduction. That knocks years off the payment period.

Posted via web from The Newport Beach Lifestyle

Tuesday, February 23, 2010

HUD Secretary Requests $41.6 Billion 2011 Budget. Five Goals in Focus

Stating that the nation's housing market has made significant progress toward stability during the past year, Secretary of Housing and Urban Development Shaun  Donovan presented the Department's 2011 budget request of $41.6 billion to the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies.

The requested funds do not include a projected 6.9 billion in FHA and Ginnie Mae receipts and represents a 5 percent reduction from the $43.72 billion (net of FHA and Ginnie Mae funds) requested for Fiscal 2010.

Secretary Donovan said that the budget reduction confronted his department with difficult choices and it chose to prioritize core rental and community development programs; fully funding Section 8 Rental Assistance, the Public Housing Operating Fund, and Community Development Block Grants. 

Cuts will be made in funding for a number of programs including the public housing capital fund, HOME Investment Partnerships, Native American Housing Block Grants, the 2002 Supportive Housing Program for the Elderly, and the Section 811 Supportive Housing Program for Persons with Disabilities.  He said that in some instances these programs had received substantial funding from the American Recovery and Reinvestment Act (ARRA), reducing the need for funds in the upcoming fiscal year...Read More;                     ....

Posted via web from The Newport Beach Lifestyle

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