8 Ways to Pay Off your Mortgage Debt Fast

Pay Off  Your Mortgage Debt Fast

Worried with your mortgage debt? Wondering how to pay off such a big amount balanced with your living standards? Well, here are 8 simple ways of making a way through this hazard.Some are better off using the money elsewhere, but extra payments and refinancing can do a number on your mortgage. In fact, about 34 percent of homeowners in the U.S. no longer have a mortgage, according to U.S. Census data. 

The recent foreclosure crisis did serve as an incentive for homeowners to pay off their loans sooner rather than later – and some have actually given it a try.

One of our clients paid his $90,000 home mortgage in less than three years. In order to finish off the mortgage, he repeated the same tactics he had used to vanquish his credit card, student loan and auto loan debt. What was the secret ? ''It was too simple and easy'', he said, ''rather than cutting down I didn’t increase my expenses, plus I was careful not to borrow any more money''.

While living mortgage-free may sound like an enviable goal, paying off your mortgage early isn’t always the best use of your money, says Todd Tresidder, a financial coach and author who publishes the website FinancialMentor.com. He was asked about the merits of paying off a mortgage early so many times by his readers and clients that he wrote up an exhaustive 5,200-word article, with charts, covering all the considerations.

“The intuitive response is to get out of debt. We all want the security of owning our castle free and clear with one less expense to deal with. The prospect of making monthly payments for the next 30 years is antithetical to freedom,” Tresidder wrote. “However, there are times when intuition and finance disagree. The correct answer is not cookie-cutter but must be custom fitted to your personal financial situation.”

If you have high-interest credit card or student loan debt, you’re much better off paying those off before making extra mortgage payments. Saving for your child’s college education and funding your 401(k) at least to the point of getting the maximum employer match – and maybe more – may also be more important than getting ahead on your mortgage.

Beyond that, you want to make sure you have enough cash on hand for emergencies because drawing from your home equity isn’t always easy. If your mortgage is underwater, or if you anticipate losing your house to foreclosure or short sale, making extra mortgage payments is just throwing money away.

The harder calculation is whether you’re better off investing your money or applying it toward your mortgage. When the market is strong (for whatever investment you’re making), you will likely earn much more on your investments than you are paying in interest on your mortgage. But if your investments lose money, you would have been better off applying that cash to your mortgage.

Worried With Your Mortgage?

Many people aim to pay off their mortgages before they retire, but even that may not be the best move in all circumstances.

Having a mortgage does provide a tax break, but it’s not as good a benefit as many people think. According to an analysis of 2012 tax data by The Pew Charitable Trusts, just under 24 percent of tax filers claim the deduction. Many homeowners, even those who itemize, often find they do better on their taxes with the standard deduction.

For those homeowners who are fully funding their retirement accounts, are free of high-interest debt and have enough cash socked away for other life goals, here are eight simple ways to pay off your mortgage early.

Add something to every month’s payment. The advantage to extra payments is that all that money goes toward principal. Early in a mortgage, most of your regular payment goes toward interest. According to calculations by Bankrate.com, if you added an extra $100 to your payment of a new $100,000 30-year mortgage at 4.5 percent interest, you’d pay off the mortgage eight and a half years early and save more than $26,300 in interest.

Make a payment every two weeks. There are companies that volunteer to set this up for you, for a fee, but you can do it yourself for nothing. You’re effectively making a full extra payment each year. Paying half your mortgage payment every two weeks, on that same $100,000, 30-year mortgage at 4.5 percent, would cut just under 5.5 years off the term and save roughly $14,000, according to a calculator at The Mortgage Professor site run by Jack Guttentag. Splitting your mortgage payment into two pieces produces minimal savings.

Make extra payments whenever you can. Beck and her husband started by paying $35 extra per month, but then began making additional payments, at one point so eager to pay off the loan that they made eight payments in a month.

Make one extra payment a year. This provides about the same savings as making half a payment every two weeks. When you make the payment isn’t important. You could make it at the end of the year or wait until you get a tax refund or a bonus.

Refinance your mortgage to a lower rate, and keep making the higher payment. The amount this will save depends on the exact figures, but it should shave years off your mortgage and save you thousands in interest.

Refinance your mortgage to a shorter term. This cuts the amount of interest you pay significantly as well as getting you out of debt sooner.

Contribute funds from another source. Designate money from a bonus, odd jobs or freelance work toward paying of the mortgage. If your income is variable, rather than making regular additional payments toward principal, make one big payment when you can.

Cut expenses and put the savings toward your mortgage. Change to a cheaper cellphone plan, cut the cable cord or otherwise cut living expenses and devote that extra money to extra mortgage payments. Living a frugal lifestyle may be difficult in the moment, but it’s worth the struggle if your ultimate goal is to be debt-free. 

The most important challenge is not to panic and not to linger. Plan your expenses and savings ahead and live a peaceful life life in your own risk-free home.

Foreclosed homes in Washington D.C.

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who happened to have stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. 

Foreclosed homes in DC

Formally, a mortgagee, or other lien-holder, obtains a termination of a mortgagor's equitable right of redemption, either by court order or by procedural operation of law. A mortgagee may sue on a note without foreclosing, obtain a general judgment, and collect that judgment against other property of the mortgagor, without foreclosing. When all other avenues have failed a lender may seek a judgement of foreclosure. Mortgages are formally foreclosed at auction by a licensed auction specialist.

If you are house hunting, you may want to consider buying a foreclosed home, also called a real estate owned (REO) property. The two common ways of buying a foreclosed home are through a real estate agent or through a public auction. Negotiating the purchase price of a foreclosed home may take a little longer than a typical real estate transaction because the process may require multiple levels of approval. the bank will have to approve the offer, and in some cases, an investor may own the property and will have to provide approval as well.

Despite many challenges, auctions can be a good resource, as long as the excitement of bidding does not lead you to buying a foreclosed home at an inflated price or more than you can comfortably afford. It is always a good idea to do your research and set your budget before you attend an auction. Otherwise you may choose to work with a real estate agent experienced with foreclosed properties to guide you through any additional paperwork that may come with buying a foreclosed home and can help you determine if the price is a good value.

Pricing for a foreclosed home is typically set at market value in an effort to move the property quickly. You will want to submit a fair and reasonable offer, as most banks will list properties at a fair price. Distress Sales resulting from bank foreclosures often represent a great way to get a fantastic deal on a home. It's not easy for the average home buyer to find these deals, because you have to keep searching to see when one comes up. So be alarmed or you might miss the finest deal!

If you are looking for foreclosed homes in Washington D.C. area, there are great opportunities to be found within the Bank of America Real Estate Center. Whether you are an experienced home buyer, an investor or a first-time home buyer, they put foreclosure information at your fingertips to help you be confident about choosing a property that’s right for your situation. Take a look at listings for foreclosed homes in D.C. and then work with an experienced real estate agent to visit properties that interest you. The impact of foreclosure goes beyond just homeowners but also expands to towns and neighborhoods as a whole.

Before you start looking at foreclosed homes, you will need to determine how much can you comfortably afford. You will want to make sure the costs for your mortgage, property taxes and insurance are typically no more than 36% of your income before taxes and other deductions. 

Getting a home inspection is always a good idea, but it is particularly important when buying a foreclosed home. This will help you determine the condition of the home, estimated cost of repair, a fair and reasonable offer and most importantly funding the purchase. If you find that repairs are needed for your REO purchase, you may want to consider an FHA 203(k) Renovation Loan. An FHA 203(k) Renovation Loan is a mortgage that can cover the purchase price plus funds for renovation by financing the “as improved” value of the home.

A title search is especially important when buying an REO property due to the unique transfer of ownership at foreclosure. There may be liens on the title that may not be uncovered until the closing process begins. However, a real estate professional who is experienced in foreclosed homes can be a valuable resource in guiding you through this process.

If you decide to move forward with a REO purchase, getting prequalified gives you the advantage of being better prepared to make an offer. Getting prequalified is a process in which a prospective borrower provides financial and other information, such as employment history and funds for a down payment, in order for a lender to determine how much loan the borrower may obtain for the purchase of a home. In addition, a prequalified status shows that you are not just browsing, which in turn makes you more attractive to a seller. Bank of America has loan products that can help with the purchase of an REO property. Beginning the prequalification process is easy and you can get started at the Bank of America Home Loans website.

You can consider Bank of America as a source for REO properties when you are looking to take advantage of today’s affordable housing. Search for homes on the Bank of America Real Estate Center to access Bank of America foreclosure listings and information.

You are your best adviser. Only you can decide if buying a foreclosed home is a good investment for your current situation. Weigh the pros and cons, do your research and work with qualified professionals to help you make the decision that’s right for you.

Flipping Houses in Washington D.C.

Washington DC is a great place to flip property but the price point is high for most new investors. DC has been undergoing major revitalization and as a result you can find good deals in all four quadrants (NW, NE, SW & SE) in DC. Flipping houses is a great way to get your money to work for you. You may have seen shows like flip this house or maybe you’ve been thinking about how flipping homes can help you secure you and your families future.Washington D.C. is emerging as the city of possibilities. Flipping houses in D.C. has turned out to be a business of fortune for many investors.

The Petworth neighborhood in DC is one of the hottest areas to flip right now.  The average deal price is about 350K and ARV is around $650K, so with a spread of $300K and average rehab cost of about $120K you can see why competition in Petworth is fierce.  Here a some rehabs in Petworth that closed in the last 90 days.A flipped home on the market in Petworth that was bought in January for $250,000 and is listed at $597,500.There is new statistical evidence that furthers the conclusion that the DC area is a pretty good place to be if you’re flipping houses.

From my Real Estate experience, flipping in DC have had major success in the NW quadrant. Most say homes are a little more expensive but once rehab is complete the re-sale value is amazing. I recommend Washington, DC to anyone that can afford it.The best thing successful investors have done is buy the property right. They've created their profit in buying the property for the right price. The things unsuccessful investors have done is buy wrong buy rushing and not really understanding how to buy and going cheap on the rehab. They end up wasting money on holding cost because people will not buy that house.

A flipped home on the market in Petworth that was bought in January for $250,000 is listed at $597,500 after completion of the renovation. There is new statistical evidence that furthers the conclusion that the DC area is a pretty good place to be if you’re flipping houses. According to new data from RealtyTrac, DC is still the second-best metro area in the country when it comes to flipping single-family houses. Average gross profits on a flip in the second quarter of 2014 totaled $136,135 in DC.

Here’s a chart showing the other top cities’ metrics:

 

Flips made up 10.2 percent of all sales in DC proper in the second quarter, more than twice the national average for the quarter, according to RealtyTrac. Gross profits nationwide were $46,000; in DC proper they were much higher, at $222,106. (That’s in contrast to the lower metro-wide figure cited earlier.) DC flips were bought for an average of $296,395 and sold for an average of $518,501, according to the data. However, there are several skills and people that every potential flipper should have in place before even considering entering into a real estate transaction of this nature. In this article we'll look at the top five "must-haves" you'll need to succeed in this endeavor.

1. You need to hire a group of experts

While a house flipper can certainly go it alone, it will certainly help to retain individuals that are familiar with the legal, accounting and construction ramifications of flipping houses.Flippers typically work against the clock, so they must renovate a home on budget and then turn it around and sell it before the financing costs eat up their profits. In any case, a bevy of experts including a real estate agent, an attorney, a contractor or renovator, an accountant, a home inspector and an insurance agent can ensure that the work is completed in a timely and efficient manner.

2. You will need a handyman or knack for Home Improvement

The house flippers that make the most money buying and selling homes tend to be handy people. That is, they have the ability to step in and lend a helping hand when time or money constraints kick in. Most flippers incorporate or renovate features like change a sink, install a countertop, do basic electrical or plumbing work, brush a fresh coat of paint, stain old-fashioned floors, add an outdoor wooden deck and/or a firepit, build a pergola facing the garden, and/or shingle a roof. There is no end to the list, it simply will depend on your budget and preferences. Although it is not a good idea to renovate over the top and raise the budget too high for buyers to afford.

The obvious answer is that if you can do the work yourself, you won't have to pay someone to come in and do it. However, there are other advantages to being handy as well. For example, there are times when it will be impossible to get an electrician to install an attic fan on short notice. There are also times when a job must be completed without warning at the last second in order to obtain a certificate of occupancy. In these instances, having the ability to navigate your way around a tool box is very valuable.

3. You will need a good lay of the Land

The buyer should know about the area in which they are buying property. A buyer should know, for example, what characteristics (acreage, number of rooms, type of home, etc) are the most desirable in the area in which they are looking to buy. Equally important is knowing what houses in the general vicinity have sold for and if there is likely to be any future development in the community (such as a new school, condominium or shopping center) as this could affect supply and demand.

4. You will need a good Estimator

By definition, house flippers attempt to buy a property and then resell it at a profit in relatively short order. In order to do this, however, the flipper must typically make some structural and/or cosmetic changes to make the property more appealing to the next buyer.If the flipper underestimates the costs associated with the refurbishment he or she may be exposed to large monetary losses. Therefore, a flipper should be familiar with construction materials (their use and their cost), as well as local construction codes, the cost of local labor and the time it should take to do a given job. It takes even the most seasoned construction professional many years before he or she is aware of all the nuances that exist. In any case, before becoming involved in "flipping", be certain of your abilities to estimate a job in terms of both cost and time.

5. You will have to be Patient

One of the biggest obstacles to making money in the real estate market is that buyers tend to overpay for a given property.

Typically, buyers become emotionally attached to a property or develop some other bond with it, which in turn forces them to enter into a contract on less than favorable terms.However, savvy flippers have the ability to avoid emotional purchases, and the desire to find diamonds in the rough and properties on the cheap. They also understand that if they aren't buying a property at a favorable price and with favorable terms, it makes sense to simply move on to greener pastures. The fact is that patience is a difficult virtue to teach and hone. In general, either you have it or you'll lose a lot of money trying to learn it.

We continue to see low housing inventory in the D.C. metropolitan area, making homes that have been flipped more attractive to potential home buyers. By purchasing a flipped home, they are able to get into a home that feels new while still being in an established neighborhood.

 

There are plenty of rundown homes in the city that could use the grit and sweat of an energetic flipper. Redfin analysed the neighborhoods where house flippers walked away with the biggest gains in 2013. Two neighborhoods in Washington, D.C. - Petworth and Brookland were among the top three, with average gains of $312,400 and $271,900, respectively. The Beaumont neighborhood of Portland, Oregon, ranked second, with an average gain of $285,600.

House-flipping is becoming an increasingly profitable business in U.S., remarkably in Washington DC. However, many stumbling blocks may be witnessed here-within, although it is possible to predict that a cautious flip with proper utilization of the capital and resources can lead to a remarkable WIN!

DC Dream-home Story of an Amazing Couple……

Sarah and Leonell had been married for 6 years. Since last year they have been relentlessly exploring their dream home in Washington D.C. Sarah who was born and brought up in D.C. chose to live here till last breath.

A Beautiful Dream of a Dreamhouse

Sarah once said, ''Life in D.C. has become an integral part of our life. We enjoy nightlife of Gallery Place, shopping in City Center, dining at Chinatown, jogging to the DuPont Circle and the list goes on and on. I can never say enough of life in D.C''.

Leonell, who origins in Dallas has also habituated with the exciting lifestyle in D.C. Leonell was excited to say, ''there’s so much to do in DC, we never really get bored of our DC life. I don’t miss Dallas anymore'', he laughed.

With their first child on the way, Sarah and Leonell were looking for a home to call their own and to assure a secured future for the new member. In early 2013, they thought they had found it a three-bedroom row-house on the northern fringe of Columbia Heights. The type of house that would offer the space they wanted for their growing family and a chance to move into a neighborhood that had emerged as one of D.C.'s hottest areas.

Unfortunately they had a disappointing experience as the house had been mortgaged for decade and never been paid off. They felt betrayed and forged, they were broken. They were tensed and full of anxiety when they first contacted us for a second try, as the baby was waiting to see the world in just three months from then. We were also too anxious to help the amazing couple. Henceforth, the search began, a perfect home that would live up-to their dreams and satiate their needs were to be ascertained.

They foresaw a house not too big but one that had been fully gutted and renovated, with new bamboo floors, a mid-sized bedroom with an open balcony adjacent, a smaller child-bed with adequate flow of natural light throughout, a finished basement that could easily double as a play area for the little one on the way, an open-concept kitchen and living room on the main floor, and a new deck off or a miniature garden at the rear of the house where the family can sit around the red fire in frosty winters.

The Urge to Find a Home of their Own

After a hectic search we found a house that best reflected their preferences. Sarah and Leonell after visiting the house along with all required legal documents associated with the property, both smiled with a gust of relief. They were so satisfied with our cooperation and endorsements that they decided to make the brick and stone house their loving home. In spring, 2014, they signed the “holy grail” (the sale-contract) and unpacked their dream-home.

Sometimes buying and selling Real Estates which may sound a dullsville business, can as an add-on be socially beneficial and exhilarating when you see a convinced client relieved from the pros and cons dilemma of the process, settled in their own home with their loved ones. Finding the right dream-home in a preferred neighborhood means bringing home an incarnation of heaven on earth.

A Perfect Family Home

The dream-home story of Sarah and Leonell followed the same fairy-tale ending- “And they lived happily ever after” and not to forget Mr. Leonell junior who is caught every now and then running around the front-yard that is tastefully carpeted with fairy ring grass by Sarah.

We’ll always keep them in our treasured memento for their overwhelming gratitude and for being the most amicable client that they have always been. We are eagerly waiting for  expanding the memento list with many more amazing clients like them. You are just a few steps away from your ever desired home, let us bridge your dream to reality. Every CityDwellers trade has an underlying story behind it and a great many lives attaining homely serenity. We are delighted to welcome building many more of such crowned stories and change the lives of many wonderful people like you.

We Help & We Care

(N.B.- Due to our privacy and compliance policy, disguised names have been used. Nobody with similar identity or name is intended to coincide with.)