Millennials are kicking off their 20s in a historically different economy. What may seem like wild and crazy money investing practices are actually completely normal and supported by the IRS. Unlike previous generations, the new generation will not be burdened with financial hang-ups or previous financial disasters. Millennials’ ability to invest in property will help them tackle their debt and ultimately save money.
Sure, getting into the housing market for the first time can be intimidating, with the likes of Ovedecors.com making for just one of many considerations as that’s the interior decor stage of the process.. It’s important to take all the steps in front of you and create a strategy you can stick with. For Millennials, it’s important to know that investing in property isn’t just about keeping up with housing prices and securing a home in a potentially fluctuating market. In fact, you have more control over the process than you might think. Here are three rules you can use to ensure your home investment is an effective strategy for lowering your mortgage payments.
1. Compare Mortgage Interest Rates
Some things you might think are financially wild and crazy are actually the least stressful and the most important part of building a home investment portfolio. Mortgage interest rates aren’t a secret anymore and most buyers, including Millennials, have access to loan information on the Internet. Shopping around for mortgage rates is a great place to start. Mortgage Guys always compares mortgage rates and some of their best discounts are available on new mortgages.
2. Consider a Home Equity Loan
On your first home investment, it may be tempting to finance everything out of your savings and auto loans. However, if you have a decent income, you can actually pay more for a home with a home equity loan. Not only are home equity loans more flexible in the event of a financial emergency, they are often less expensive for borrowers. A home equity loan is the most flexible option for Millennials looking to lower their mortgage payment. Interest rates on home equity loans can be as low as 1% or as high as 5%, with a range of percentages to consider.
Remember, home equity loans aren’t allowed by the IRS, so they aren’t a good option for those who would like to invest in property to boost their home equity. If you can’t qualify for a home equity loan, then you may want to consider other funding strategies, like lowering your monthly mortgage payment. The money you get can definitely go towards services such as those rendered by Jack Harrison Air, as this forms part of the construction and upkeep of your property.
3. Pay Your Mortgage
After determining your home purchase price, you may be tempted to kick off your investment with a hefty mortgage payment. However, mortgage interest and home expenses can greatly increase your mortgage payment. Unless your home costs are extremely low, you are going to pay more for your mortgage over time. The good news is you have more control over your monthly mortgage payment than you might think. It’s actually very simple to lower your mortgage by adding a home equity loan to your monthly mortgage payment. You can even pay off your mortgage early by refinancing with your home equity loan.
Some refinancing options require you to pay certain points that increase your monthly mortgage payment, like your mortgage insurance premium. However, most refinancing options, including home equity loans, only require you to pay back a certain amount of your loan and then it’s free to invest your savings elsewhere.
If you’re struggling to build your home investment portfolio, your mortgage payment may just be the number you need to knock down. On average, people pay $720 per month for a mortgage. While you may think it would take longer to get into the home equity market, you could actually do it in just one year. Make your mortgage payment a priority and if you do, you’ll start to build your home investment portfolio at a reasonable cost.