Afonso Real Estate

Posted by Afonso Real Estate on 5/10/2017


Two thirds of American homeowners are somewhere in the process of paying off a mortgage. It may seem like common sense that everyone should try to pay off their mortgage sooner rather than later. However, there are circumstances when it benefits a homeowner more to hold onto their mortgage longer.

In this article, weíll offer some tips on paying off your mortgage, when you should refinance, and offer some tools that will help you along the long road to debt-free homeownership. If youíre a homeowner and find yourself asking these questions, read on.

I can afford to pay more each month on my mortgage, but should I?

In many cases, paying off your home as quickly as possible saves you money in the long run. A shorter loan term means less interest applied to your loan which could save you thousands of dollars in accrued interest.

What many people donít think about is whether that money could be better spent elsewhere. If your mortgage interest rate isnít too high, you might be better off allocating that extra income toward investments or retirement funds where they could earn you more in the long run.

This technique is typically most beneficial for younger homeowners. In your 20s and 30s you stand the most to gain from long-term investments, especially tax-benefitted retirement funds. Ultimately youíll have to do the math, which is tricky because circumstances change; markets vary, our income goes up and down, etc. However, a good starting place is to determine whether you could earn more in retirement and investments than you could by paying off your mortgage sooner and therefore saving on interest. 

Iíve owned my home for a few years now, should I refinance?

Refinancing is a term that has become ubiquitous for homeowners. There are a few important things to understand about refinancing. First, lowering your monthly payments is not always ideal if it means youíll end up paying more interest in the long run. Ideally, refinancing your mortgage will help you pay the least amount in total.

One way this can be accomplished is by refinancing to a 15-year fixed-rate mortgage which often darry slightly lower interest rates. This option is designed for people who have improved their credit and increased their income since signing their first mortgage.

Math isnít my strong suit. How can I figure out my finances?

If all of the numbers and percentages associated with mortgages and refinancing seems overwhelming--youíre not alone. Fortunately, there are mortgage and refinancing calculators that will give you a good idea of where you stand if you decide to increase your payments or to attempt to refinance your loan. Here are some great tools:
  • Use this mortgage calculator for determining how much you would save by making extra payments.

  • This refinance calculator will help you understand the potential benefits of refinancing your mortgage.

  • To determine how much you could earn through investments (rather than paying more toward your mortgage) use this helpful tool.

  • You might be able to increase your savings by creating a better budget for yourself. This website will help you make a detailed budget and hold yourself accountable each month.

Tags: Mortgage   refinancing   home   finance  
Categories: Uncategorized  

Posted by Afonso Real Estate on 9/11/2013

RefinancingReason #1: Interest Rates are Forecasted to Rise.

The Mortgage Bankers Association (MBA), which is the national organization representing the real estate finance industry is forecasting a rise in interest rates for 2013 and 2014.

Reason#2: Your Adjustable Rate Mortgage Could Adjust Up.

If you find yourself with an ARM, it may be the perfect time to explore your options regarding fixed-rate mortgages. Interest rates fluctuated every month for 2011 and 2012, according to data provided by Informa Research Services, a leading information provider to the financial industry. With interest rates plunging to historic lows over the past few years, there's nowhere left to go but up. Which leads us to...

Reason#3: The Government's Financial Involvement is Expected to End Soon.

Ever since the recession in 2008, the government has been buying up mortgage debt from banks in an effort to stimulate the housing market. This is expected to end in the next two years, and it is anyone's guess when exactly this will take place. Refinancing now is much better than waiting until you start to see the signs of non-involvement, by which time it could be too late.

Reason#4: Cutting Down on Interest.

If you find yourself in a 30-year mortgage, it may be the best time to explore your options regarding a 15-year, fixed-rate mortgage. While your monthly payments would be higher, the amount of money you pay for your home would be significantly less. Interest payments on a 30-year mortgage can jack up the price of a home astronomically. While the monthly payments may have looked appealing initially, paying off the principal sooner will leave you much better off financially in the long run.

Categories: Financing  

Posted by Afonso Real Estate on 4/3/2013

With mortgage rates at all time lows, you might be wondering if you should be considering refinancing your home. While it may seem like a great thing to do, there are a few things to consider before you decide. An obvious reason for refinancing to a lower interest rate is the monthly, and even more importantly the long term, savings you will get. Depending on the decrease in interest rate and the amount of the loan, you could see a savings of at least $50/month or $600/year or $6000/10 years. Refinancing to a shorter term loan can also help save on the interest you pay over the life of the loan so if you can afford a 15 year mortgage the benefits outweigh that of a 30 year. Some things to consider - If you have owned your home for a long time, your monthly payments are going more towards the principal of the loan, not the interest. Refinancing would cause you revert back to monthly payments of more interest than principal, losing the equity that you have built in your home. You may be charged for an appraisal on your home which can be around $500. The bank will want to make sure that you are refinancing for an amount your home is worth so some out of pocket expense is required. If you plan on moving in the next few years, refinancing may not be worth the amount you will pay in closing costs. There are several refinancing calculators available on the web including at and No matter what you choose, being fully informed of all the options, costs and advantages/disadvantages is key to a successful refinance. Make sure you talk with you current lender, as well as other lenders to get the best refinance possible.

Tags: Mortgage   loans   refinancing  
Categories: Financing