Let’s Burn the Mortgage

Generally Buyer’s focus on the “Price” of a home and not the “Cost” of a home.  The two major considerations when buying a home are present and future, also called Price and Terms.  Price is that sum which one agrees to pay at the moment of closing.  It is the cash that moves from the Buyer to the Seller in that moment called the transaction.

Terms on the other hand are usually what happens after the closing action; not always, but usually.  Interest paid to the Buyer’s Lender would be one of the terms.  It was not dictated by the Seller, but it is part of the transaction nonetheless.  Over the life of a 30-Year, 5% Fixed Rate Mortgage on a $250,000 home the homeowner will pay approximately $434,825 (based on a 10% down payment).  While it is true that in most cases the home mortgage interest can be claimed as a deduction on the homeowners income tax filing, is there an alternative?

PIP (the payment of Principle + Interest + Principal) can save big money over a short period of time.  Paying the current months payment plus the following months principal in effect cuts the term of the loan in half just a little at a time.

At one time in the not too distant past homeowners celebrated the payoff of a mortgage with a mortgage burning party. What a great time to return to that tradition!

Mark Finchem
Office: (520) 808-7340
MFinchem@longrealty.com