Archive for December, 2009
Merry Christmas
All of us here at City Creek Mortgage, want to wish you and yours a very Merry Christmas. May the season find you in the warmth of family and friends.
Your City Creek Mortgage Family
Time for a Home Makeover?
Many Americans today are stuck in the proverbial rut of debt. With the cost of credit card interest rising, and credit harder to obtain, some have reached the end of their rope. Others may not be in such critical circumstances, but may have improperly structured debts that are costing more interest than they should.
One of the greatest financial tools is tax deductable mortgage debt. For someone in a 25% marginal federal income tax rate with a 7% state income tax rate, a mortgage with a fixed interest rate of 5% will have an after tax interest rate of 3.4%. When fighting to get out of debt, it is much easier to make progress paying down a mortgage costing only 3.4% after tax vs. an unsecured credit line at 10%, or even a car loan at 6%
Don’t Cannibalize Your Equity
Don’t Cannibalize your equity by paying closing costs. One of the biggest mistakes homeowners make is continually adding to their principal balance by accruing loan fees to refinance every time an opportunity arises to lower their interest rate. With the average homeowner refiancing every three to five years, it’s no wonder mortgage balances are not reducing. Before they recoup the closing costs of their last mortgage, they refinance again, resulting in an ever-increasing loan balance.
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