Denver Home Equity has grown. Now reduce the loan
Denver has seen 5 years of the median price of houses rising from $209,900 (10/11) to $345,000 (10/16). This is the result of lower inventory*, and from what the statistics look like today, this trend will continue especially with houses available to purchase in October 2016 standing at only 8,008 versus 2010 when there were over 23,049 houses for sale in Denver. So while your equity has grown making up for the downturn, your mortgage may not have shrunk as much as you would like. There are options to consider here in Denver and the following is a plan to reduce the time and current balance. See the end of that article for another pair of tools to help your Denver home mortgage shrink.
Most people think they’ll have a house payment and a car payment for the rest of their lives but it doesn’t have to be with a plan and a little discipline. The plan is to make additional principal contributions to a fixed rate mortgage to shorten the term and save tens of thousands in interest.
If a person were to make an additional $100 payment each month applied to principal on a $175,000 mortgage, it would shorten the loan by five years six months. If the person were to make $200 a month additional payments, it would shorten the loan by 9 years. $459 additional payment would shorten it to 15 years.
If a person does make a decision to regularly pre-pay their mortgage, it will be their responsibility to verify that the lender is applying the money to the principal each time as opposed to being placed in the reserve account for taxes and insurance.
In today’s market, a savings account pays around 0.5% or less. Even with the low mortgage rates available, there is still a considerable savings. People who might need the funds in the near future should carefully consider this option due to the difficulty to access equity easily from one’s home.
Make your own projections using the Equity Accelerator.
*Too often Realtors, self included, talk about homes as though they are just items on the shelf, or inventory. Unfortunately it seems that after 31 years in the residential real estate business, this is normal to me. It is your home and we, the Realtors, need to remember that. So challenge me when I come to talk about your home, make sure I do not use the word “inventory”.
When you have just purchased a Denver Home and have a new mortgage, it almost seems impossible to shrink it. There is a way and we should talk about a rather crafty way to shrink your mortgage. Just e-mail me and ask for my “Honey I Shrunk the Mortgage” presentation. It is another way to approach what appears to be a daunting task. OR Call me at 303-880-5585 ext 3 so we can visit!