| Private Mortgage Insurance | | | | Equity Is A Cheap Source of Funds |
| If your borrowed amount to pay for your home | | | | The equity in your home could be a good source of |
| exceeded 80% of its appraised value, private | | | | low-interest funds for major purchases. Refinancing |
| mortgage insurance (PMI) payments are likely. PMI | | | | should be first choice, followed by a home equity loan |
| payments are neither trivial nor tax-deductible. | | | | or home equity line of credit, which is more flexible but |
| Depending on your down payment PMI can effectively | | | | with highest interest rates, in order to generate cash |
| raise interest rate by 0.32% to 0.93%. | | | | for financing home improvement or other major |
| To get rid of PMI, prove to your lender that your | | | | expenses that would incur debt. If you have a lot of |
| mortgage balance is below 80% of your home value. | | | | high-interest debt, use equity to reduce interest rates. |
| Do everything it takes whether with extra payments | | | | The interest is tax-deductible too. But don't overdo it. |
| to reduce loan balance or a new appraisal in case of | | | | Even though they are good debt, mortgages are debt, |
| rising housing value in your neighborhood. Discuss with | | | | so don't abuse your equity. Always remember that the |
| your lender ways to eliminate PMI. | | | | collateral for the loans is your home. |
| Refinancing Can Save You Money Too | | | | No matter how much time it takes, it always pays to |
| Generally if a percentage point can be cut off the | | | | get the most out of all your mortgage money. Though |
| interest rate on mortgage, refinancing is advised. But | | | | mortgage loans are probably the cheapest loans on |
| you also need to consider closing costs and points. | | | | the market, since the amount of money owed tends |
| Find the easiest ways to achieve that. Even reducing | | | | to reach the highest amounts, the smallest cut on your |
| mortgage payment by $100 a month saves you | | | | interest rate will imply huge savings over the whole life |
| thousands over the years. | | | | of the loan. A half point interest reduction over a 30 |
| Once you succeed in lowering loan-to-value to | | | | year loan can result in thousands of dollars saved in |
| eliminate PMI, it pays to continue additional payments to | | | | interests. |
| principal. It's a major financial advantage to own a | | | | So, If you can eliminate PMI, refinance for a lower |
| home outright but there's no hurry either. You will | | | | interest rate or destine a higher portion of your income |
| mostly emerge ahead by following a 30-year payment | | | | towards debt repayment, do. This will save you |
| schedule and investing extra money in market | | | | significant amounts of money over the whole life of |
| matching index funds. With an online loan calculator, | | | | the loan. And you can invest that money and generate |
| work out the amount you can save by paying off your | | | | additional income to make your financial life more |
| loan early and compare savings with earnings from | | | | alleviated. |
| investing in an index fund at 11%. | | | | |