 Mortgage
Strategies
Paul Loveless, your Shenandoah Valley
Real Estate Agent, hopes to assist you in
your search for Winchester VA Homes for
Sale by
offering several Mortgage Strategies to
help you save money on your new
mortgage. Remember that in order to save
money on your mortgage you have to be
willing to do a little research to find
the best possible mortgage for you. Easy
enough if you put these helpful
tips to work.
Crunch the Numbers
While considering your Monthly Mortgage
Rate, the health of your finances, and
your assigned interest rate, there may
be a strategically appropriate move that
you could benefit from. A proactive move
would be to pay the interest or
principal completely before originally
anticipated in order to effectively
lower your overall interest payments.
Pay Down the Principal
It is a known fact that once you assume
a mortgage rate with companies, most of
the money you pay in the first half of
the mortgage will essentially only
cover the interest. Meaning it might be
in excess of twenty years before you own
more of your home than your bank does.
That said, it is possible to accelerate
this process: make larger, considerable payments
on your mortgage. The less you owe the
bank the less interest you will also
owe.
 Existing
Mortgage
Consider assuming an existing mortgage
on the home you intend to purchase,
rather than facing the administrative
costs associated with getting a new
mortgage. The benefit to this strategy
is that the existing mortgage rate will
be considerably less than a new rate. A
mortgage must be transferable in order
for the buyer to assume the existing
mortgage, and you must pay the
difference between the purchase price
and outstanding debt upfront in cash. A
second mortgage is also available to
alleviate the additional financial
burden.
Seller Financing
Exactly as the name implies, this
strategy will require you to pay the
seller directly over a period of time
without the hassles of borrowing money.
This option is particularly attractive
to those who for some reason do not
qualify for a loan. This approach allows
you to negotiate a better interest rate
while avoiding unnecessary
administrative fees, and also
enables you to avoid Mortgage Insurance.
There are advantages for both the buyer
and seller when acting in this
arrangement, however, be cautious if the
seller is eager to accept these
circumstances, especially if the seller
has had difficulty selling the home.
Something else to consider is that the
seller may be more interested in
short-term mortgages, those that do not
exceed three years. An advantage to the
seller would be the steady stream of
income and returns without the concern
for Capital Gains Tax. Additionally, the
seller holds collateral, the home,
if the buyer defaults on payment.
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using a Buyer's Agent, please
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If you have any questions or would like
more information, please call us at
540.955.0730 or send an email to
paul@paulloveless.com.
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