Tag Archives: Budget

How to pay off my mortgage faster:

With the arrival of spring comes the most important period when the purchase and sale of property increases. The months of March, April, May and June are the busiest in the housing market.Mortgage

One of the most important variables in buying and selling property is the mortgage loan that is used to acquire the property. Today we will discuss some strategies to pay off our mortgage faster, this will save thousands of dollars in interest and these savings can be used for the education of our children, for our retirement, or for the purchase of a second property.

First let’s make a summary of the most important variables in a mortgage:

  •  The payback period is the time we have to pay our total mortgage.
  •  The term, this is the term by which our mortgage will have the same interest, same payments, and other variables. When the term ends we have to renegotiate the interest and the different variables.
  •   Fixed or variable mortgages, fixed mortgage maintains a fixed rate for the term chosen. A variable mortgage, the interest rate can vary depending on changes of interest rates.
  • Open or closed mortgages, open mortgages have the option to pay back the loan at any time without a penalty, closed mortgage has a few options, such as making double payments per month, and up to 15% of annual payments, but if we end mortgage before the term chosen have to pay a penalty, closed mortgages are the most common, and generally open mortgage has a higher interest.To demonstrate the different strategies, we will use a numerical example where we can see how to pay our mortgage on a open term, and how to save thousands of dollars in interest:

First, we can change our monthly payments biweekly payments. In the case of a mortgage of $ 250,000, our monthly payments of principal + interest would be $ 1,181.83, end up paying the mortgage in 25 years, and would pay $ 104,549.56 in interest. If we change payment every two weeks, our payments would be $ 590.62, and we would pay our mortgage in 22 years and three months, saving $ 13,218 in interest.
Second, we can make extra payments. These extra payments will go directly to the mortgage principal. If we make an extra payment of $ 1,000 per year (making payments biweekly principle + interest), we will pay the mortgage in 21 years and we will save a total of $ 21,141 in interest.
Third, we increased the principle + interest payment every two weeks (we paid an extra $ 1,000 per year). If we increase our payments by 2%, $ 12 more every two weeks, we will pay the mortgage in 18 years and we will save a total of $ 31,569 in interest.

I enclose a link where we can make the same calculations, changing the variables of our existing mortgage:

http://www.mortgagecalculator.org/

In short, some of the options to pay before your mortgage and save on interest would be: make payments on your principle + interest more frequently, making extra payments per year goes directly to the loan principle and decreases the balance + interest.

Saving Money Tips on Airfare:

Saving Money Tips on Airfare:image

One of the most frequent frustrations when you are planning a trip and trying to save money is when you put in the spotlight a ticket for days or weeks and when you’re ready to buy, they suddenly raise the price. That’s when we complain of not having done the reservation earlier, when the price was still low and was on the days we had marked for travel. Continue reading Saving Money Tips on Airfare:

How to budget a household:

What is budget and why putting together a budget is important:

The budget details all household income and expenses. It is a very effective way of knowing how the money was spent, how much is needed for the satisfaction of basic needs and how income should be distributed to make it possible to fulfill all the obligations and achieve the important goals. Following are the steps of how to budget a household:

Your budget, plus help you identify your expenses and control your finances:

• It will help avoid impulse spending
• The guide to decide what can and cannot buy
• Allow you to keep track of how you spend your money
• Household budget will help create a savings plan
• Contribute to protect against the financial consequences of unforeseen events

Download free calculator:Household monthly budget calculator

The first Budget:

It is very likely for the first time you assemble a budget will be surprised with the amount of expenses facing your home every month. This realization is best to do as a family, thus each person can see what approach can work with maintaining the balance of the household bills.

Classifying expenditure:image
Classify your expenses and identify those that are easily reducible to see what you can save.
We suggest you classify structural or compulsory costs (rent, electricity, water, etc.), costs of basic necessities (food, basic clothing, transportation, etc.) and discretionary costs (entertainment, tourism, no basic clothing, etc.)

Structural costs are directly related to lifestyle, are difficult to change at short notice.

As for the necessities, you can decide when and where the purchase is made. It is recommended that, besides taking note of them, choose a single payment and that is easily maintained. This will buy more easily and increase control over these expenses. Pay with one credit card and making a payment on the payment date can be used to meet the expenses list and have a better control. Easily you can identify “where the money is going”.

Regarding discretionary spending is also advisable to select a single payment as a way to maximize control. Payment by credit card or debit card has the advantage of having a limit for this type of expenditure. This expenditure can be reduced if the first aims to save or going through adverse or uncertain circumstances. Continue reading How to budget a household: