Are Long Term Mortgages For You?

Title:


Are Long Term Mortgages For You?



Word Count:

496



Summary:

The various ways of getting a house these days has definitely become easier, along with the way that it can be paid back. Traditionally, a mortgage on a house meant a maximum of 25 or 30 years before amortization. New mortgages, however, are going way beyond the more traditional limits and are pushing it back to 40 and 50 years. Here are some things you need to know about long term mortgages.



Reduced Payments



Because the payments are now stretched out over a much longer...





Keywords:

home, equity, funds, secured, owner, loans, loan, finance, mortgage, remortgage, credit, history, de





Article Body:

The various ways of getting a house these days has definitely become easier, along with the way that it can be paid back. Traditionally, a mortgage on a house meant a maximum of 25 or 30 years before amortization. New mortgages, however, are going way beyond the more traditional limits and are pushing it back to 40 and 50 years. Here are some things you need to know about long term mortgages.



Reduced Payments



Because the payments are now stretched out over a much longer period of time, this means that the monthly payment is also greatly reduced. This point is usually the main selling argument - and it is a good one. If you are looking to reduce your monthly payments for some reason or other, then this may help you.



The Overall Costs Are Greater



Reducing monthly payments, however, are only half of the story. While it does free up some cash on a month by month basis, it also adds longevity to the loan. Longevity always means more interest - much more interest.



Calculate Total Costs



When you actually are ready to consider what such a mortgage will cost you, you need to sit down with the details of a 25 or 30-year mortgage, and compare it with the results. This would be even more important if you are considering refinancing an existing mortgage.



Advantages



A long term mortgage can be very handy under some circumstances. For instance, if you are planning on buying property with the intent to renovate it and then resell it, this type of loan would actually allow you to minimize your own expenses and monthly payments while you are fixing it up. Another situation would be when buying a rental property. While you have renters in, you pay extra on your monthly payments, and in those in-between renters’ occasions, you just make the low regular payment. This type of loan also could allow you to get a larger house than you could otherwise afford.



Disadvantages



A long term mortgage can work against you, too. The added interest has already been mentioned. Another major consideration, though, should be the value of the house itself. Forty or fifty years down the road, what will the house be worth? Or, what will the economy be like - or your health? While these are some "ifs", and unknowable, it still should take up a moment or two or your thinking process. A short term mortgage lessens the risks simply because it is shorter. It also could free up money at the end of the mortgage term to use in more creative - or needed ways when you reach that stage of life.



If you should decide to go with a long term mortgage, be sure to compare it to several other offers. This gives you a degree of flexibility as well as the opportunity to choose the best offer. Also, be sure that there are no early payment penalties so that you could pay it off early if you are able.

A Do-It-Yourself Debt Reduction Program

Title:


A Do-It-Yourself Debt Reduction Program



Word Count:

598



Summary:

Need a debt reduction program? You are not alone. Here are 5 tips on reducing debt that you can do right now.



1 – Knock Off Using Credit



If you haven’t done this one, then this is the place to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don’t have them at all. Figure out how to make more income and pay cash instead. This is the single most effective action you can take.



2 – Never Commit to Spending More Than Your In...





Keywords:

debt,debt reduction,credit,credit card,credit debt,interest rate,income,money





Article Body:

Need a debt reduction program? You are not alone. Here are 5 tips on reducing debt that you can do right now.



1 – Knock Off Using Credit



If you haven’t done this one, then this is the place to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don’t have them at all. Figure out how to make more income and pay cash instead. This is the single most effective action you can take.



2 – Never Commit to Spending More Than Your Income



When you pay for an item with credit because you don’t have the cash, you are committing your future income to pay the credit company. Then you experience economic slavery. Ask yourself if you just want the item or if you really need it to increase your production of income. If you need it, figure out how to make the cash to pay for it over a short period of time, rather than buying on credit. Find ways to increase your income and use it to pay both current expenses and pay off credit debt.



3 – Always Pay More than the Minimum Payment Required



Your debt reduction program will be most effective if you carve out a minimum of 10% to 15% of your income. Use this money to reduce debt. Set a target of paying 3 to 5 times the minimum monthly payment on every credit card. Set aside some of the payment money every week until the statements arrive. It’s always easier to save small amounts over 4 weeks than pay a big bill all at once.



Your credit card payment strategy should also include paying more on the highest interest rate card. Another strategy is paying off low balance cards as fast as possible. After you pay those cards off, the money you were paying on those cards can be paid against the highest interest rate cards.



4 - Never Pay Late or Spend Over Your Limit



Do not destroy your debt reduction strategy by getting hit with late payment or over-limit fees of $25 to $39 on which you’ll pay interest. Plus, if you pay over 30 days late, that black mark stays on your credit record for 7 years – a harsh penalty to pay.



Recently a Vice President of a U.S. bank stated that over 24 Billion dollars was paid out in interest, late fees and over-limit fees last year on credit cards. Do you think the credit card company really minds if you pay late or go over your limit? If they didn’t want you to spend over the limit they could have declined the charge, right?



5 – Cut Back on Expenses



Reducing debt requires as much cash as possible, as fast as possible. Look closely at where your income is being spent and cut back on any expenses that do not contribute to the production of more income. Before you spend, figure out how much money that purchase is going to bring back in to you, your family or your business.



TIP: If you are a business owner, always promote your business to everyone – don’t cut back on that activity. Just make sure you are getting more sales from your promotional activities than what it costs to promote.



Correctly managing the money in a business or household to ensure its survival takes more than a debt reduction program, but this is a great place to start. There are other steps that you can take to increase income, pay bills on time, have cash reserves for emergencies, increase profits and pay yourself more money. Who doesn’t want that, right?