Inflation: Economics- a general increase in prices and fall in the purchasing value of money.
Inflation effects everyone in one way or another. The Romanski Group is here to help lessen that impact in any way we can. Fortunately, there are steps you can take toward lightening the overall load, and a great place to begin is paying off your mortgage faster. Payments toward your loan’s principal can drastically cut months and even years off the tail end of your loan. Check out these long-run-minded ways to reduce your monthly expenses by taking seemingly small steps now!
Learn more about your Mortgage
Before jumping in, let’s just take some time to simply dissect the different pieces of your mortgage. Experian gives great insight breaking down the details of your home loan by stating: “Principal on a loan is the original amount you agreed to pay back. Over time, the principal balance goes down as you make payments. But because of the interest you also pay on a loan, only a portion of your recurring payments goes toward paying down the principal. The principal balance helps determine how much interest you owe with each of your monthly payments, so paying down your principal can help you save money on interest charges.”
3 Mortgage Tips to Fight Inflation
Make an extra mortgage payment each year.
Just one extra mortgage payment toward the principal amount can shave years off the tail end of your loan! Such a small step that makes a huge impact on your life!
Apply any extra or unexpected income toward the principal of your loan.
Do you have an unexpected or extra income such as a tax return or holiday bonus coming to you? Use this toward your mortgage’s principal. There are three reasons why this could be a smart move for you. You might be surprised at how much money one extra mortgage payment can save you.
#1: Saves Money on Interest
#2: Build Equity Faster
#3: Pay Off Your Mortgage Early
Refinance your loan for a lower mortgage rate when rates decrease.
Buying now will obviously look different than even as recent as a year ago. However, mortgage rates remain relatively average considering the long term scope of mortgage rate history. Check out the graph below from Freddie Mac. It shows the current mortgage rates available (as of 10/27/2022). When/if the mortgage rates drop again, you can choose to refinance your loan! Your monthly payment will drastically change depending on the current rates controlled by the Federal Reserve.
Closing Thoughts
For the best, long-term financial results in purchasing a home, it’s imperative that you utilize a mortgage company and lending officer you trust for this process. If you don’t already have a home loan or for your next home loan, we will always recommend our friends at Ruoff Mortgage. Check them out if you haven’t already.
For up-to-date information on YOUR Indiana area neighborhood or a FREE Seller Consultation – call The Romanski Group at (765) 293.9300. Using an experienced team is the way to get your home SOLD! You deserve the BEST Real Estate Team in the Lafayette Indiana area!
