Taking stock is the natural thing to do at the close of the year. Staying on track and having a financial plan can make all the difference between traveling into the future with a flight plan or just flapping your wings to stay in the air with no direction in sight.
When it comes to real estate, there are some simple and important things you can do to protect your investment, and save money.
1. Consider Refinancing Your Home
Most of us in the United States have lost equity in our homes but if you still have some value in your property and haven’t taken advantage of the historically low interest rates available for home loans, refinancing can save you some serious money over the long haul.
On a $750,000 home, paying 5.0% versus 6.5% will save you over $11,250 annually in interest. This is worth considering if you are planning on keeping your home for a minimum of 3 years because there are always fees tied to refinancing which you need to factor in as part of the cost of doing so.
Check out the following websites to help you evaluate your mortgage options:
2. Switching to biweekly or 13 monthly payments of your mortgage
Increasing the frequency of your mortgage payment can drastically reduce the amount of interest you will pay over the life of your loan. Your lender can help you by providing you with “pick-a-pay” options for you to choose from. Some lenders give you that option on each monthly mortgage bill so that if you have some rough months financially you can switch to interest-only payments, while if you have a steady reliable income you can increase your payment frequency or pay the 15-year mortgage payment amount. Both ways can save tens of thousands of dollars over the life of your loan. They also function as a nice option for a providing you with a forced savings method to build up equity in your house.
Natalie Bergman is a licensed realtor, affiliated with the Beverly Hills and Greater Los Angeles Board of Realtors, California Association of Realtors and National Association of Realtors. She and her business partner, Nicole Costas, function as Socal Acquisitions LLC under the Keller Williams Realty shingle.