Financial goals often top the list of plans for the new year. As you look ahead to 2017, you might think about how to pay off debt, including your mortgage; remodel your home and take advantage of the market. We have a few practical ideas for you on each of these topics.
Paying Off Your Mortgage Early
Financially savvy individuals work hard to pay off all their debt, including their mortgage as soon as possible. According to Dave Ramsey, about 20 million Americans own a residence free and clear. For others, their mortgage is the only debt they still owe.
You can use any of the following methods to pay off your mortgage early. All of these methods take your hard-earned dollars and apply them to your principal, helping whittle down your payments.
- Add an extra $50 to $100 or as much as you can afford to each payment.
- Pay an extra house payment every three to six months.
- Apply a bonus to your mortgage.
- Increase your mortgage payment every time you receive a raise.
Before you start with any of these plans, check with your mortgage company to be sure that you are making your payments directly to your principle.
Refurbishing Your Home
In order to determine how much money you will spend on remodeling your home, take the following four steps:
- Estimate your costs based on preliminary research – Pricing can run $200 or more per square foot, depending on what you plan to do.
- Set your budget – Decide if you want to pay cash or take out a loan to pay for the remodel. You might decide to obtain a home equity loan, refinancing with cash or a line of credit. With a line of credit, you only need to pay the interest. Instead, divide the total principal by the amount of months — 60 to 120 — that you want to take to pay and add that to the interest payment so that you can pay off the loan sooner.
- Seek quotes from licensed professionals – While online research helps you determine prices, a professional quote will provide you with a more accurate assessment. Be sure that the quotes match each other in terms of comparable items. Check the contractor’s references.
- Prioritize your wants – While you have specific wishes regarding your project, you will need to prioritize exactly what you want so that you can stay within your budget. Your contractor should provide you with options that can help keep prices down.
2017 market predictions
In late 2016, prices escalated, increasing housing values. However, low mortgage rates still kept housing affordable. If you are considering investing in rental property, 2017 might be the time to do it. Consider that interest rates at less than 3 percent in some cases will beat inflation prices, making this an attractive time for prospective buyers to purchase a home.
By making financial savvy decisions, such as gaining control of debt, paying off your home and taking advantage of upcoming housing trends, the new year might be your most solvent yet. Contact Brad Jensen if you have questions about real estate in the Park City area.