Emergency Preparedness – The 50 Year Home Mortgage is On Its Way.
QUESTION: Considering 18% credit card debt, and 6% home mortgage debt, which will cost you the most money in interest expense during the repayment period?
Most would say this is a NO BRAINER – 18% is more than 6%.
ANSWER: When repaying the first year’s payments on short-term credit card debt (5 years or less), about 45% of the monthly payment is applied to principle. When repaying the first payment on long term mortgage debt (30 years) less than 19% premium is going to principle. That means that the 6% loan is really costing over 80% in the early years of your repayment schedule, and it will take until the 222nd of 360 total payments before 50% of your monthly premium actually goes to principle, with the rest being interest. Do the math at www.interestratecalcultor.com for charts, graphs, and repayment schedules.
Question: Why will a lender let you close credit card debt to your home mortgage when you refinance?
Answer: Because he is dumb like a fox and knows how to get the most interest charges out of you.
For more information contact (your emergency preparedness specialist).
CATCH THE VISION, GET FACTS, DEVELOP SKILLS, AND BE PREPARED.