Mortgage interest is the most expensive cost to homeownership AND a tax deductible expense! The following tips will help you when you are looking to buy or refinance a home.
A Shorter Term Equals Less Interest Paid
The longer your term the lower your payment but the more you’ll spend in total interest. The shorter your term the higher you payment and the less you pay in total interest. Part of your monthly payment will go to principal and some will go to interest. You will pay more principal per payment the closer you to get to the end of your payments. On a 30 year term it usually takes until year 10 before you pay more principal than interest on your payments. The better your credit score the better your interest rate will be.
Your Payoff Amount is Almost Always Larger than the Principal Owed
Remember that the principal amount due on your house isn’t the payoff amount. Usually just add a mortgage payment to the principal amount due to get a ballpark amount on what you owe. You can get a payoff amount by contacting your lender.
A Month of Interest is Prepaid When You close on a Home
Loan estimate will show the amount of prepaid interest your lender is using to estimate the amount of time it will take to close on your new loan. The prepaid interest amount can be adjusted based upon your closing date.
A good Cincinnati / Northern Kentucky realtor will be able to field your mortgage interest questions and usually works closely with mortgage experts who can also help with more complicated advice.
Tom Reese has 20+ years experience in helping his clients sell their homes for a price that sells and makes them a profit. Tom has helped his clients buy and sell property in every neighborhood in Northern Kentucky and Cincinnati.
About Tom Reese
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