Voak Homes » Mortgages

Monday Morning Coffee – Paying off a 30-Year loan in 15 Years

Scott Voak — Sun, 23 Jan 2011 00:08:41 +0000

Monday Morning Coffee

Paying off Your Mortage Early

Good morning,

I hope you had a nice weekend. Last week I showed off my parenting skills. I had Zach already for the school bus (breakfast, potty, changed, etc) and we went in to say “goodbye” to Mommy and Cori asked, “What’s that all over his shirt”.

“Um, breakfast?” Turns out he caught a mild case of pneumonia and was out of school all week. Fortunately, the Dr. cleared him for the zoo on Saturday because Aunt Sussi came to town. After spending 5 hours looking at all the big animals, snakes, etc. his favorite? The bees. Could have done that at the park across the street.

I had a question for a buyer last week about taking a 30 year vs a 15 year loan. They mistakenly thought that paying a 30 year loan off in 1/2 the time meant doubling the payment. It definitely does not. If you are thinking of taking a 15 year loan instead of a 30 year loan, I am actually in favor of taking the longer loan to give yourself flexibility. There is a lot of interest now in paying off debt early, and the slightly lower interest rate on the shorter loan can be appealing. However, given that the economy is going to be a bit rocky for a few years, I am more in favor of the flexibility of a lower payment so that if there is a job loss or a cut in pay, the money you have set aside will cover your mortgage a bit longer and give you a chance to recover. If you do take a longer loan, you still have the flexibility to pay it off more quickly, but you can actually structure the payments to your needs. Let me give you 2 examples to show the difference. For each example, let’s assume a $400,000 at 5% interest amortized over 30 years which gives a monthly payment of $2,147.29.

Foreclosure Mess – Round 2

Scott Voak — Mon, 18 Oct 2010 03:59:55 +0000

Foreclosure Mess

(Round 2)

The latest foreclosure crisis is creating situation that will have to result in major changes to the system and more than likely, billions of dollars of loses for banks. I spent a lot of time reading up on it this weekend and here is the abbreviated version of what the issues are (as I currently understand them): Read more ...

Monday Morning Coffee

Scott Voak — Mon, 11 Oct 2010 03:24:44 +0000

Monday Morning Coffee

Importance of Title Insurance

Good morning,

I hope you had a great weekend. Zach and I took our stab at clothes shopping. Bought him some size 4 pants that looked a “little” large. Once we got them home, I was informed that the correct size was “4T”. Ah well, back to Target.

Things are getting interesting with foreclosures as the number of banks with “issues” with their foreclosure process is growing. In several states the Attorney General is stepping in and of course, politicians all over are jumping on the issue. The timing of this is fortuitous if your goal is higher home prices because although demand has slumped after the tax credit, if the banks have to delay foreclosures again for a couple of months to sort his out, it will keep inventory from growing too quickly and help prop up prices. However, it does point out a very large concern all buyers should have, and that is Title Insurance.

Typically, the seller’s agent picks a title company and it just happens that they have a friend selling the policy. As a buyer, you need to make sure your agent is making sure you have a title policy from a company that is financially able to withstand the potential issues. Espcially if you are purchasing a home that has recently been foreclosed on. You do not want to have your ownership challenged only to find that the company insuring your purchase has gone out of business. A few companies that are likely to survive any crisis would be Chicago Title, Fidelity Title and First American Title. As a bare minimum, make sure they are publicly traded so you can look at their financial strength. Read more ...