I’m a 53 year old single man with little savings. I repaid all my credit card debt a few years ago. I have decided to buy a house now. I’m buying a house because the rent is about the same as a mortgage. I’m trying to repay my mortgage as soon as possible.
With my credit union credit card, I can move my balance once a year with a 0% loan without any fees. It’s a very high credit limit and I was thinking of putting it in a mortgage as a way to repay the mortgage faster, rather than paying it to the mortgage company every month.
That way, you can repay your card during the year and save a lot of mortgage interest. My calculation for paying the weekly principal means that the house can be paid off within 7 years. I think it will be a little better if you make a large prepayment. I just wanted to know your thoughts on this issue.
This is my number. With a $ 260,000 mortgage for 30 years, the monthly payment is $ 1,390. If you pay an extra $ 2,500 a month, you can pay off in about seven years. However, paying $ 25,000 a year may be a bit faster.
Become a home buyer
Dear home buyer,
Taking a 0% loan with a credit union credit card will rob Peter of paying Paul.But in this case you are both Peter When Pole.
sorry Get all DostoevskyHowever, you need to be careful about how you repay this loan, as you risk committing to both your mortgage and your loan. If you lag behind the latter, you may face significant repayments at the end of that 0% interest rate. In addition, your bank will not accept credit card payments as a down payment. When you apply for a loan, it also does a forensic examination of your finances before accepting a mortgage.
I’m not the only one to ring the warning bell. Say “dangerous curve first!” David Walzer, Bankruptcy lawyer based in New York. “What if I’m late for a single payment and the zero interest rate jumps to 18%? What if I have another rough period and I can’t pay off my card on time? All payments in time These credit card companies do regular credit reviews, even if they do exactly what they do. “
Credit card companies also have a lot of small print. “You plan to transfer your low-balanced debt to another low-balanced card. But what if that new low-interest offer doesn’t arrive? Now you can’t pay with your credit card and your home Loans will also be difficult, “Waltzer adds. “I have filed for tens of thousands of bankruptcies in New York and New Jersey, many of them for those who tried to do what you’re explaining.”
“”“You are robbing Peter to pay Paul. But in this case, you are both Peter and Paul. Sorry for welcoming all Dostoevsky, but be careful.”“
Your basic monthly repayment looks a little optimistic. Talk to your financial adviser about your goals and why you become a homeowner. The big part missing here is your salary, to a lesser extent the possibility of inheritance. Seek advisor’s advice before jumping in. In particular, expose your finances, hopes and dreams about where you want to be when you reach retirement age and whether you are working beyond your traditional retirement age.
I fully support your desire to buy your home. Let’s say you’ve been working for another 15 to 20 years: not only have you earned that fairness in your home with monthly mortgage payments, but your home is probably-or very likely. -An option if you want to withdraw cash and move to a small house that will increase in value in the meantime and give you more. With inflation and hopefully higher salaries, you may also find that your mortgage payments are manageable.
You are 53 years old Have To pay off this loan in 7 years, and you don’t have to build up extra debt. If your mortgage servicer allows it, repayment of the regular amount of your mortgage is more effective than an annual lump sum, given that you are paying interest at the same time. There may be. For those who can afford the extra, both are good ideas as long as they make sure they have the necessities such as emergency funds.
Waltzer is more careful about owning a house than I am. He warns that if you have a low credit score, your mortgage interest rate can also exceed 5%. “The cost of owning a house is always higher than expected,” he adds. “If you buy a $ 260,000 home, I think it’s going down 10% ($ 26,000). But the closing costs are pretty high. So you’re probably approaching $ 40,000. Will it be wrapped in your mortgage? ? “
Layout all options. 15 years vs. 30 years. The pros and cons of paying extra and saving that money. Insurance and property taxes; home repairs; closing costs; and potential bidding wars. The shorter the term (15-year mortgage instead of 30-year mortgage), the less interest you pay. Still, interest rates are rising. Monthly mortgage payments with a 30 year mortgage interest rate and a 20% down payment It’s about 50% more expensive than it was a year ago.
And finally, Moneyist is an optimist (most of the time): you may not be single forever.
check out Moneyist Private Facebook The group looks for answers to the most difficult money problems in life. Readers write to me with all sorts of dilemmas. Please post a question or tell us what you want to know. Or consider the latest Moneyist column.
Moneyist regrets not being able to answer the questions individually.
By emailing your question, you agree to publish it anonymously to MarketWatch. By submitting a story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that you may use the story or its version on all media and platforms, including third parties...