Dallas Home Mortgage Assistance

There has been a lot of discussion about the historically low Dallas mortgage rates and the fact that right now is a great time to refinance your home mortgage, if at all possible. And when you stop to consider all the effort that is going into creating new programs for struggling home owners, it would be worth talking to your mortgage lender even if you think you might not be in a position for a Dallas refinance right now. You never know, one of these programs might be just the thing for your existing situation.

After you’ve figured out that it makes sense for you to refinance of your existing Dallas home loan, the next thing you might want to consider is what to do with the money you’ll be saving. That may sound like a silly question, but trust me, if you’re not careful it is very easy for that extra money to just ‘evaporate’ at the end of each month and not really have much impact on your situation.

In earlier articles we covered a couple of different approaches to what you might do with that money. In all examples we used a hypothetical monthly savings of $175 with your new mortgage. While that much money is nothing to sneeze at, it’s probably not going to get many people overly excited either. However, with a bit of disciplined effort applied to that money, we showed how it could turn into something that you can excited about.

The first example was to pay down existing debt, such as credit cards. For our example we used two cards with interest rates of 12% and 16% carrying balances of $4000 and $8000 respectively. We applied the extra $175 to the minimum required payment to show that we could pay them off in about 4 years as opposed to the twenty-three years it would take paying just over minimum monthly payments.

In example number 2 we took the savings and applied it towards the principle on your Dallas mortgage to help pay it off more quickly. Our example used a fixed rate of 5% for 30 years on a $225,000 loan. By applying our extra cash to the principle each month, we reduced the time to pay off the mortgage by over 7 years. Those 7 years of not paying on the mortgage equates to a savings of over $58,000.

The third option we want to discuss is investing that money each and every month. The investment goals could be anything from your retirement to a vacation to a child or grand child’s college expenses. Your investment motivations are completely your own; we simply want to show you what could be accomplished with this money.

We’ll need to use some ‘guesstimates’ in this calculation, but we’ll use conservative numbers to be on the safe side.

Let’s say that for the next 18 years you’re going to add $175 to an account that already has $2000 in it (setting up a college fund for your new baby). To remain conservative, we’re going to use an annual rate of return over those 18 years of only 7%.

After 18 years, what kind of college fund does your child have waiting? A little over $83,000! I think most people would agree that that is a pretty good college fund to get started with.

Now let’s look at a 30 year old who is looking to retire at age 65. We’re also going to say that this account is starting off with a balance of ZERO, but it gets the $175 savings added to it each and every month. Given this situation, if you did nothing else for your retirement, by the time you were 65 years old this account would have over $300,000 in it. Again, not too bad.

You need to remember of course that these figures are all hypothetical. If these numbers have got you thinking though, you really owe it to yourself to discuss it in more detail with a Dallas mortgage lender as well as an accountant and/or a financial planner.

In the end though, it is worth understanding that even things that may initially appear like ‘small change’ can have a big impact on your long term financial goals. Your Dallas home mortgage is more than a bill; it should be part of your overall financial plan.