Build Equity By Choosing The Right Mortgage

Build Equity By Choosing the​ Right Mortgage
Homeownership is​ the​ key to​ building wealth for most people because it​ is​ an​ involuntary savings account .​
As you​ pay down your mortgage each month,​ the​ value of​ your interest in​ the​ home rises.
Build Equity By Choosing the​ Right Mortgage
Equity is​ a​ beautiful word as​ every homeowner knows .​
Once you​ get used to​ making your mortgage payments,​ you​ can rest assured that you​ are creating a​ nest egg every month .​
Throw in​ the​ appreciation on​ the​ property and your nest egg can grow large before you​ realize it .​
This savings account,​ better known as​ equity,​ can provide the​ means for putting your kids through college,​ dealing with emergencies and retiring .​
Building equity is​ fairly simple .​
Just make your monthly mortgage payment .​
There are additional steps you​ can take to​ move the​ process along at​ a​ faster pace .​
These steps are all about the​ type of​ mortgage you​ obtain when you​ purchase your home .​
When you​ purchase a​ property,​ particular for the​ first time,​ it​ can be a​ stressful event .​
Right or​ wrong,​ most people tend to​ take anything they can get in​ a​ mortgage loan so they can meet the​ closing of​ escrow .​
This is​ understandable,​ but can come back to​ haunt you​ financially .​
If you​ can step back from the​ chaos for a​ moment,​ you​ might consider the​ following options that will help build equity .​
A 30 year mortgage is​ the​ default for most homebuyers .​
It is​ the​ first thing that comes to​ mind and most assume it​ is​ the​ safest option .​
a​ 15 year mortgage,​ however,​ is​ going to​ cut down on​ the​ total interest you​ pay on​ the​ loan as​ well as​ supercharge your equity growth .​
The 15 year loan is​ far better than a​ longer option,​ but only if​ you​ are absolutely sure you​ can meet the​ monthly payment requirements .​
If you​ have any doubts whatsoever,​ there is​ another option that you​ can consider.
Making prepayments on​ principal is​ a​ simple,​ proven way to​ build equity .​
The idea is​ to​ make an​ extra monthly payment when you​ have sufficient cash to​ do so .​
Effectively,​ you​ use your home as​ a​ savings account by doing this .​
The advantage over other investments is​ the​ equity growth should be tax free .​
Before taking this step,​ find out from your lender if​ there are any prepayment penalties .​
Regardless,​ making two of​ these payments each year will quickly build equity in​ your home.
If any of​ these ideas sound interesting,​ you​ can still take advantage of​ them even if​ you​ currently have a​ mortgage .​
Refinancing your mortgage gives you​ an​ opportunity to​ correct mistakes you​ made when you​ more focused on​ getting through escrow .​
Talk with a​ mortgage broker to​ find out your options.

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