Some people looking to move up, move every 4-6 years.
Having the mentality that this is the way to "move up," they are actually just hurting themselves financially in the end.
In the first 5 year of your mortgage, 80% of the payment goes to interest.
So, if you are moving on an average of every 5 years then of all of the money that you have paid on your home only 20% has gone to build up equity.
With a $200,000 mortgage at 6% interest, the payment of principal and interest is $1199.
00.
With the first payment, $199.
00 goes to principal and the rest goes to interest.
The principal payment creeps up very slowly with month 2 including only an additional $1.
00.
Being a real estate appraiser 8-10 years ago, I realized that the mortgage companies that I provided serve to were not happy with the values of the homes that I appraised.
As a person of character it was hard to work under those strains and in the end I had to stop working in that industry.
Well, now we know what chaos this trend of lending caused to the well being of our nation.
Foreclosures are higher than they have been for a long time, and people are out of work.
Many people could have kept their homes.
However, they did not realize that there is a way to accelerate the pay off of their mortgage without refinancing or even changing their monthly payments.
Many of them just did not see a way out.
Some very scary statistics are that in 1992, 18% of people ages 65 - 74 still had house payments.
However, by 2004 the number of people still in debt because of housing had risen to 32%.
It just continued to rise as noted in the most recent year noted, to 43%.
How are these people ever going to retire? The levels of personal debt have also risen.
In 1992, the median amount of housing debt carried by people 65 to 74 was $24,609; 15 years later, the median amount owed was $69,000 (both figures are 2007 dollars).
The amount of debt carried on their credit cards has also grown.
In 2007, 37% of 65- to 74-year-olds had a credit-card debt, up five percentage points from 1992.
Although, the median amount owed had tripled during that time to $3,000.
Debt is not always bad in and of itself, if you can pay it off.
When looking at the ratio of debt to income, the banks put up a yellow flag when your debt reaches over 40% of your income.
Of those ages 65 to 74, 11.
2% hit that threshold recently, up from 4% in 1992.
These trends have got to stop, or in the future no one is going to be able to retire.
Many are looking for a better way.
There is a way to pay off their mortgage in a faction of the time,, they need to find it now.
They need to go to Pay Off Your Mortgage and learn how to save their retirement now.