Our Real Estate Blog
Two thirds of American homeowners are somewhere in the process of paying off a mortgage. It may seem like common sense that everyone should try to pay off their mortgage sooner rather than later. However, there are circumstances when it benefits a homeowner more to hold onto their mortgage longer.
In this article, we’ll offer some tips on paying off your mortgage, when you should refinance, and offer some tools that will help you along the long road to debt-free homeownership. If you’re a homeowner and find yourself asking these questions, read on.
I can afford to pay more each month on my mortgage, but should I?
In many cases, paying off your home as quickly as possible saves you money in the long run. A shorter loan term means less interest applied to your loan which could save you thousands of dollars in accrued interest.
What many people don’t think about is whether that money could be better spent elsewhere. If your mortgage interest rate isn’t too high, you might be better off allocating that extra income toward investments or retirement funds where they could earn you more in the long run.
This technique is typically most beneficial for younger homeowners. In your 20s and 30s you stand the most to gain from long-term investments, especially tax-benefitted retirement funds. Ultimately you’ll have to do the math, which is tricky because circumstances change; markets vary, our income goes up and down, etc. However, a good starting place is to determine whether you could earn more in retirement and investments than you could by paying off your mortgage sooner and therefore saving on interest.
I’ve owned my home for a few years now, should I refinance?
One way this can be accomplished is by refinancing to a 15-year fixed-rate mortgage which often darry slightly lower interest rates. This option is designed for people who have improved their credit and increased their income since signing their first mortgage.
Math isn’t my strong suit. How can I figure out my finances?
Use this mortgage calculator for determining how much you would save by making extra payments.
This refinance calculator will help you understand the potential benefits of refinancing your mortgage.
To determine how much you could earn through investments (rather than paying more toward your mortgage) use this helpful tool.
You might be able to increase your savings by creating a better budget for yourself. This website will help you make a detailed budget and hold yourself accountable each month.
Safe CategoriesNot all safes are created with the same purpose. Some may be designed for you to be able to open from your smart phone, whereas others are created from an everyday object, such as a book, to be hidden in plain sight. Others might be small and fireproof but not very effective against burglars who can easily carry them out of your home. When shopping a safe and thinking about size, remember that you should probably buy a safe that is a bit larger than your current needs since you will probably someday add items to your safe. Here are the main types of safe to help you choose which one is right for you:
- Water-tight and fire resistant. If you have important documents, jewelry, or electronics that you want to keep secure, a weatherproof safe is the way to go. For added security against floods, keep the safe away from areas that are prone to water damage like basements. These are the most common safes and are a great choice.
- Diversion. Diversion safes often only have minimal security measures (locks), if any at all. Their main strength is that they can be hidden in plain sight, such as being a book inside a bookshelf.
- Wall-installed. You've probably seen this type in the movies. They are installed into a wall and can be hidden behind objects. These have the advantage of being hidden like a diversion safe, but also use thick metal and complex locking mechanisms. But be prepared to pay a hefty price for all those features.
- Anti-burglary. These safes are very difficult to break open. They have complex locks and thick metal with few vulnerabilities.
- Object-specific safe. Some safes are designed just for weapons, others designed just for jewelry.
What to keep safeGenerally speaking, anything of value to you that isn't easy to replace can be kept in a safe. Depending on how easy it is to access your safe and how often you use the item, you may decide it's simpler to leave the item out of the safe. However, you can always use the safe to secure backups of documents and files. Here are some ideas for items to keep in your safe:
- Birth Certificates
- Social security card
- Spare keys
- Flash drive containing important photos and documents
- Important passwords
- Family heirlooms
- Weapons and other dangerous objects