What to Do With an Extra $100 each month

Another successful HARP 2.0 refinance closing today! This customer was 4 years in to his 30 year mortgage and decided to shorten his term to 15 years. Over the next 15 years he is going to save over $117,000 in interest. Smart move I say!
Which caused me to think about how the average person working a salaried job in today's economy could improve his financial situation.

Times are tough and uncertain for many.  If you have the opportunity to get out of debt sooner, why not?  Sometimes paying off a mortgage seems like it would take a lifetime but it doesn't have to be that way.  If people would spend smart and prioritize their money and budget, they could have a little more financial freedom.  The expensive clothes, pricey cars and extra "toys" are not really necessities.  And when you have to finance those items and pay interest on them, it becomes more of a liability.

Why not change your spending priorities?  The roof over your head IS a necessity!  When you make a mortgage payment, pay a little more each month.  There is nothing that says you have to make the minimum payment.  In fact, paying $100 extra a month is an additional $1200 a year.  On a 30 year mortgage that is an additional $36,000 not to mention the interest you will be shaving off!  $100 is not really a lot of money today.  $100 is about the cost of dinner for two at a casual restaurant twice a month!

If you do not have an extra $100 per month, how about just rounding up your payment?  If your monthly mortgage payment is $644, why not pay $650.  On a $100,000, 30 year mortgage it could mean saving four payments at the end of the loan.
Finally, the vehicle that is used to pay off the loan faster is the rate of interest you are paying.  If you are paying more than 1.5% - 2% than today's current rates, you should really think about refinancing your debt on your home.  Today's interest rates are historically low.  Some homeowners are swapping out a 30 year mortgage for a 15 year mortgage and keeping the same monthly payment.  There are closing costs, but if you can recoup them within two years by your monthly savings, you are doing good.

We currently have a program for homeowners who have been making their payments on time and are paying on a higher interest rate but tapped out on their equity.  If you are considering a refinance, call me as soon as possible - even if you think you have no equity.

JoAnn Young - Owner & Principal Broker - People's First Financial Services, Melbourne, FL 321-243-4917 email JoAnn@PeopleComeFirst.net