What You Don’t Know About Your Debt Can Hurt You
How much debt have you really accrued? Four percent seems small, but it adds up fast and you could be getting into something way over your head. Twenty-nine percent of homeowners are making a mistake that could cost them thousands, by not understanding how their home interest rate percentages work.
An average family, for example, gets a 30-year mortgage loan at 4.375% interest. The amount you borrow with your mortgage is known as the principal. When you pay your monthly bills part of your payments go towards paying off that principle, while another part goes towards your interest from a loan. Although one payment reduces the amount you owe on loans, the payment that goes towards interest doesn’t reduce your balance. Your loan balance will be high in the beginning, since most of your payments will be going to pay off your interest, while a portion pays your principle. When your loans begin to near its end, your interest will eventually shrink, while most of your payments go to the rest of the principal. The problem is that as you can see from the process, most of your mortgage payments are you specifically only paying off interest.
You don’t want to be stuck on a 30-year plan! Want to pay off all your house debt in 10 years or less, Give Empower Brokerage a call! We have debt specialist with years of experience that can help you maneuver through these difficult decisions.
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