Mortgages > Why Paying Off Home Mortgages Is A Dumb Idea

Why Paying Off Home Mortgages Is A Dumb Idea

by: Jed Baguio

If you're planning to refinance you're home or apply for a home mortgage. This could be one of the most the best tips you'll ever recieve. If you're like majority of the population which applies for home mortgage and chooses to put a large down payment, with the shortest term attainable and paying if off as soon as possible and thinking that their doing it smart. Well, I'm sorry to burst the bubble, but frankly its not smart from a financial standpoint and such idea could lead you to a big mistake.

Now I know that could be a shock to you, or make you feel uncomfortable and you should. This goes against the grain of what the majority of the population's concept of smart handling of home mortgages. Nevertheless, read on. I'll share to you the smart way of doing it.

The answer of how to do it smartly is exactly the opposite what the majority's idea of smart. Yep, you heard that right! This means the smart way is applying little amount of cash as down payment (But just be sure that monthly home mortgage payments only consist 30% of you're total debt just to be safe), taking the longest term available and never pay off you're home mortgage! Now this strategy may not be applicable at all times. It depends, like most financial strategy, on economic climate. Specifically factors such as home mortgage rates and you're ability to find a profitable investment vehicle. Yes, you need to start investing, we're talking about being financially smart and you cant achieve that if you don't or cant invest.

Lets start to elaborate why our strategy is more financially smart than the majority's "smart". To better illustrate I'll share to you a technique that's one of the pillars of wealth building. The technique I'm talking about is you borrow money, lets say $10,000 with an interest rate of 5% per year and you invest that money with an investment vehicle, lets say a mutual fund, with a 10% growth per year. Now let's do the math.

Borrowed Money 10,000

Total Earned 1,000 (10% of 10,000)

Total Interest Paid 500 (5% of 10,000)

-----------------------------

Total Earned $ 500

You could be sitting on a 500$ net profit! This may not be large amount of money, but remember you invested nothing of you're money giving you a Return On Investment of infinity.

How does this relate to applying home mortgage? It's the same thing concept.

* You pay as little amount of cash possible.

- This will increase you're good debt

- Put you're "down payment to be" cash to an investment vehicle. Earning you 10% or whatever then paying the home mortgage with their 5% or whatever. Giving you a profit. Important! The numbers may not be the same for you, but just be sure you're earning percentage is higher than home mortgage percentage.

* Choose the longest term. This lowers you're monthly payment and most occasions lowering you're interest rate.

* Don't pay it off as soon as possible. Don't join any programs that help you achieve that. Instead invest the extra cash to you're favorite profitable investment vehicle. What you'd rather want? paying 5% or earning 10%?

By following such steps you're actually borrowing money with 5% interest rate and earning with 10% interest rate giving you a profit of 5%! Important, this is not an exact calculations, in fact this an oversimplified example. This articles also is not aimed as an How To, but rather to give you an idea of the things possible. I still advice that you sit down with a financial advisor to have solutions tailor made to you're situation.

About The Author

This article is written by Jed Baguio. For More Home Mortgage Tips please visit my site http://www.home-mortgage-infocenter.com/.

Life Insurance Rates

Life Insurance Rates

by: Matthew Bourne

Life insurance at the present time is very affordable. Competition in the life insurance market together with the cost savings that life companies are making by operating on the Internet has depressed insurance rates, bringing them down to historic low levels. For a healthy non-smoker in their 20s, life insurance rates can in fact be as cheap as ?5 per month!

However, there are many factors that influence the final outcome of the life insurance rates for any one individual. Everything from hereditary diseases to diet will figure and, depending upon the answers that we give to the insurance company, will see our life insurance rates climb higher or drop lower than the average rates for our age.

So, just what factors will affect the insurance rates that a life company will quote for life insurance? Here is a summary of the most important elements to consider: -

Age - The younger you are the...

Life Insurance Rates

Mortgages > Life Insurance Rates

Mortgaging Your First Home

Mortgaging Your First Home

by: Jim Muscali

Securing a mortgage for the first time can be a frightening

time in your life. You want to make sure you understand

what is going on so the mortgage lender cant take

advantage of your lack of knowledge.

In spite of numerous laws and regulations it is still

better to have a very least a basic understanding of the

ideas and systems of the mortgage industry.

There are many different deals, incentives and programs for

the first time mortgage buyer. Its important to look at

each of these in detail to find out if they are worthwhile,

and if so, if they are ideal for you and your circumstances

when it comes time to mortgaging your first home.

The old saying if it seems too good to be true it probably

is should be kept in mind at all times.

There are whole range of starter mortgage plans dependent

on your situation now and what you anticipate will...

Mortgaging Your First Home

Mortgages > Mortgaging Your First Home

Mastering the Mortgages Maze

Mastering the Mortgages Maze

by: Gay Redmile

So...you're about to buy a property and need a mortgage...

Where do you begin?

Whether you are a first home buyer, have bought and sold several times, are re-financing, seeking an equity loan, or even a reverse motgage - there are a lot of thing to consider...

Do you choose fixed rate, variable rate, adjustable rate - or interest only.

Rates, fees, costs - can all vary.

Let's have a look at the differences:

Fixed Interest Rate -
usually fixed for the life of the mortgage, say 15-30 years, regardless of increases or decreases in market rates.
This type of mortgage is ideal for those on a budget - as you always know what your repayments are.

Adjustable (Variable) Interest Rate - this type of mortgage allows the interest rate to be adjusted according to the current market rates -usually adjusted at the end of pre-determined periods.
These...

Mastering the Mortgages Maze

Mortgages > Mastering the Mortgages Maze

Consider Different Reverse Mortgage Options

Consider Different Reverse Mortgage Options

by: Charles Kirkendall

There are many different reverse mortgage options: single purpose reverse mortgages, federally insured reverse mortgages, and proprietary (private sector) reverse mortgages.
Each option has different pros and cons that need to be considered when looking into taken out a reverse mortgage.

Single-Purpose Reverse Mortgages

A single purpose reverse mortgage is the lowest-cost type of reverse mortgages to obtain, but as the name indicates it can only be used for one specified purpose.
They are typically offered by state or local government agencies.
These loans a great for individuals who need cash for a specific purpose like paying property taxes or fixing up there homes.
Here are descriptions for several different types of single purpose reverse mortgages:

Property tax deferral (PTD) mortgages are reverse mortgages that...

Consider Different Reverse Mortgage Options

Mortgages > Consider Different Reverse Mortgage Options

Interested in FOREX Trading?

by: Jill Kane

The Foreign Exchange Market (FOREX) has no central exchange location yet it is the largest financial market in the world. It is over 3x's the size of the stock and futures markets combined and operates via an electronic network of a banks, corporations and investors.

Foreign exchange consists of a simultaneous buying of one currency and selling of another. Currency is traded in pairs, in other words, one currency...

Interested in FOREX Trading? Mortgages

Mortgages > Interested in FOREX Trading?

Mortgages Why Paying Off Home Mortgages Is A Dumb Idea

Microsoft Great Plains SQL Reporting and data fixing

by: Andrew Karasev

This is beginner level SQL scripting article for DB Administrator, Programmer, IT Specialist

Our and Microsoft Business Solutions goal here is to educate database administrator, programmer, software developer to enable them support Microsoft Great Plains for their companies. In our opinion self support is the goal of Microsoft to facilitate implementation of its products: Great Plains,...

data recovery Microsoft Great Plains SQL Reporting and data fixing

Mortgages > Microsoft Great Plains SQL Reporting and data fixing

Mortgages cruise

Mortgages Why Paying Off Home Mortgages Is A Dumb Idea

Tips and Ideas for Making Bead Christmas Ornaments

by: Rob Buenaventura

Have you always wanted to create your own beaded ornaments but have little experience with bead work? Provided in this article are some simple tips that will help you create stunning and beautiful hand made beaded Christmas ornaments that will make your home more festive this holiday season.

If you have never made bead Christmas ornaments, you will first need to select either a pattern...

christmas

Mortgages > Tips and Ideas for Making Bead Christmas Ornaments