Mortgage Options You Can Afford to Pay Off

Imagine having your mortgage paid off and having no monthly house payments. That money could be redirected into other financial endeavors, like university fund for the children or family holidays. Paying off your mortgage and saving on interest is one way to do it.
 
It sounds obvious, but every one should have a mortgage with terms suitable for their situation. You don’t need to do it the way everyone else does. If you educate yourself you could save yourself a bundle of cash along the way.
 
Seller’s Concessions
 
A cash back incentive is one way realtors entice home buyers to purchase new properties. This financing strategy is quite simple and encourages would be home purchasers with cash back. If a buyer sees and likes a property for $200,000 for example, the buyer can offer the $200,000 plus 6% seller’s concessions. Once the seller accepts, the house is written into the contract as $212,000 ($200,000 plus 6% or $12,000 seller’s concessions). This automatically increases the house price by $12,000 and simultaneously reduces the cost by $12,000. Sound confusing? Not really.
 
This is done so the buyer can apply for a $212,000 mortgage. The $12,000 cash back portion has been rolled into the mortgage and can be used for title search and other closing costs. This is important because closing costs are NOT tax deductible but mortgage costs are. Effectively by including these costs into the mortgage, they have become tax write-offs.
 
Seller Financing
 
Simply put seller financing means that you can pay the seller directly over a period of time rather than borrowing money and paying them lump sum. Sellers in this situation are often motivated and a better mortgage rate can frequently be negotiated. Administrative charges form lending institutions are saved and seller financing can be attractive if you can not qualify for a loan.
 
Sellers often want the steady source of income from a property sale and it will prevent them from paying capital gains tax from lump sum income. Buyers enjoy a totally negotiable deal. Rates and terms of payment can be negotiated to everyone’s benefit.
 
Pay Down the Principal
                               
Check the terms of your mortgage and confirm if there are options to pay a portion of the principal. Any opportunity to pay down directly on the principal will help shorten the life span of the mortgage. The less amount of principal you have the less interest you will be paying.
 
Always do your homework and investigate the best possible scenarios before stepping into the financial arena. Research mortgage companies and find the right option that will help save you money in the long run.