How to Slash the Interest You Pay on Your Mortgage

paying off a mortgageFor most people, their home is the single largest asset they own. And not surprisingly, the mortgage loan is the single largest debt. Paying your mortgage off early means that you pay less interest. This strategy for an early pay off is not as difficult as one might imagine if you implement the appropriate steps early on. Here are three ways to pay your mortgage off early.

1. Bi-Weekly Payments – Many lenders will allow a homeowner to make bi-weekly payments on the mortgage. This method, if implemented early in the loan, can take many years off the mortgage resulting in savings on interest and a fully owned home.

For example, if your monthly is $1500 per month, you would be paying $18,000 per year. If you paid $750 every two weeks (like most people are paid by employers), you would be paying in $19,500 per year and thereby retiring the mortgage earlier and reducing the total interest paid to the lender. A little bit can go a long way when it comes to a 30 year mortgage with interest.

2. Refinance to a 15 year Loan – By refinancing a 30 year mortgage to a 15 or 20 year mortgage, the borrower saves a tremendous amount of interest on the loan. Although your payments will be higher, shorter term loans usually qualify for a lower interest rate. If the lender would then allow a bi-weekly payment plan on the new shorter-term mortgage – the loan would be retired even earlier, thus saving even more interest charges.

3. Make extra income and put it towards mortgage payments – A strategy that many individuals are actively using in today’s uncertain economic climate is to build a side business or home-based business around family and work commitments. Australian website, the Home Business Hub has written some fantastic articles with loads of tips and advice about how to make extra money by working from home or through a home based business.

Although it is a great feeling to retire a mortgage early, the borrower needs to remember that other loans with higher interest rates should be retired before spending disposable income on retiring the mortgage that would be at a lower rate. Credit cards, personal loans and car loans often have a higher interest rate. These types of loans should be paid off first, for example.

Car Resale Factors

car resaleAre you one of the growing number of car owners who like to change their cars as often as they change their cellphones? Your game plan probably involves eventually selling your current car and using the proceeds to make a down payment on a new one. If you are, you definitely want your car to fetch as high a price as possible.

Since a car’s value goes down fairly quickly, you have to work at keeping its resale value up. With this aim in mind here are some things to consider:

1. Consider depreciation. It is a major factor in a car’s resale value. The minute you drive your car off the manufacturer’s lot, it immediately loses at least 9 percent of its value, and with each year that passes, its value goes down 15 to 25 percent. Do your research first before making a decision on what car to buy, and keep your ear on the ground for consumer trends. Each year there will be models that are projected to retain their value more than others.

Five years down the line, the car brands that have long-standing reputations for durability and reliability tend to have a higher resale value than the newbies. German cars such as VW’s, Beemers, and Benzes tend to score more residual value and used car buyers are willing to pay much for 5-year-old models of these than 2-year-old Fiats or Toyotas.

2. Consider your capacity to maintain your car. Commit to take care of your car and keep it in good shape, and you will be rewarded when the time comes to sell it, especially if you plan to do it on the tail end of the first 5 years. The older a car gets, the more important role maintenance plays in its value. Make sure that your car doesn’t show too much wear and tear — the more pristine it stays, the better.

3. Consider the preferences of your car’s future owners — that is, if you’re buying a new car with an intention of selling it in the future, think about what they want. The best hatchback cars (check it out) are people pleasers, and if they’re well maintained, there will always be a market for them. You may want to stay away from the flashier models and stick to the ones with more mass appeal. You may also have to rein in the urge to “make it your own”. While tweaking its features — custom paint jobs, lowering it — may give it some personality, some flash and sass, and earn you points when you take it to the streets, too much of that individuality can be bad for resale value. The more “upgrades” you give your car, the more you narrow down the number of potential buyers to the people who share your tastes, and taste is very much an individual thing. Not a lot of people want a pink car, or one with ostrich leather seats. So stick to the safe and generic with considerable longevity.

Mistakes and Challenges in Business and Life

mistakesIt is difficult for me to express my mistakes and difficulties since I started doing business.  I have had many failures and I have had many successes.  The successes seem to always blur out the failures, but in the moments just after the failure occurs I can think of nothing else.  Looking back it’s always easier to see when things started to fail and what I could have done to make it better; however, sometimes I don’t think I could have done anything to prevent the failure.

Early in my career I was working hard at a firm and making some decent money.  I had my career path laid out and I knew exactly what I wanted.  I was going to become a partner at that firm and enjoy the success of being a millionaire.  I loved money more than anything else at that time and I was willing to sacrifice almost anything to get it. I would take any opportunity that was given to me to succeed.  Oftentimes this came at the expense of others. 

There was a fellow employee of mine that was almost equally as ambitious.  We became friends.  We often spoke of our ambitions and how we wanted to succeed.  One night we spoke in detail about our goals at this company.  I told him how I was going to climb my way to the top.  I told him of my plan to become a partner.  He almost laughed and said that I could never make it.  That night as I walked home I was disappointed that I had shared my goals with him.  He was good friends with one of the supervisors who helped him get promoted several months later.  He became my supervisor.  Everything changed at that moment.  I lost my ambition and felt like I could not succeed.  I left that company shortly afterward.

There was not much I could learn from that experience except that I shouldn’t let others’ success impede my own.  I felt like because I was a much harder working employee I would rise to the top.  But I also learned that keeping those around me that can help and support me will give me the help I need.  The next job I got I made sure that I paid close attention when picking good friends.

The next company brought even more challenges.  I was in line to become the next supervisor and I had an extremely busy work week ahead of me.  I needed to complete several tasks and reports before the end of the week.  I was walking and talking on my phone at the same time when I was hit by a car that ran through a red light.  It wasn’t too bad.  I fell unconscious and woke up in the hospital.  I found out that I had a minor concussion and some bruised ribs but nothing too serious.  I wanted to leave the hospital but they forced me to stay for 3 more days. 

The worst part was that I could not complete my work for that week.  My phone was lost during the accident and I couldn’t leave the hospital.  My supervisors had to rush and finish my job for me and I was unable to get the promotion that I thought I had deserved.  The company did not blame me for getting in an accident, but they did suffer due to my accident and were not willing to promote me.

There was one small win from that experience.  The person who hit me with his car knew that he was at fault and fled the scene.  I was hoping to sue him to recover my hospital bill.  I found a lawyer and he helped me get the traffic video that showed the license plate of the car that hit me.  With his help I was able to get my money back and some more for my losses at work.  He now works at Crowe & Mulvey, LLP and helps others in similar situations.

That small win still came at a great overall loss for me.  But I did learn after these two experiences that I need to focus on what is the most important for me.  Which is not money, but instead is value that I can provide.  Bad things seemed to always find me when I sought for money and success.  When I started to focus on helping others and working hard for my family, I seemed to get much more satisfaction.