Denver Home Mortgage Assistance

If you’re looking to save money on your monthly housing expense, refinancing a Denver mortgage is a great way to go about it. Paying less means you have more money in your pocket at the end of the month. It’s easy for this extra money to seem to simply disappear into your regular, daily living expenses. However, with a little bit of effort, self discipline and a plan, you can make this money go a long way towards improving your overall long term financial position. We’ll outline a few of those possibilities here.

The biggest thing to realize is that it doesn’t take a lot of money every month to have a significant impact on your long term situation. There are three primary considerations for how to apply your new found savings to best impact your long term financial goals.

1. Paying down other high-cost debt, such as credit cards and possibly auto loans

2. Put it towards paying down the principle faster on your remaining mortgage

3. Using the money to invest in future goals such as retirement or a college savings

If you do carry other debt like car loans or multiple credit cards, it is important for you to compare the costs (i.e. interest rates), balances and mandatory minimum payments to one another. Making the assumption that you can currently make the minimum payment, you should organize and prioritize these debts by the most expensive first (highest interest rate, not highest balance), and then start applying the extra money towards that to pay it off as soon as possible.

For demonstration purposes, let’s use the following scenario of your debts: Credit Card 1 with a $4,000 balance at 16%, Second Credit Card totals $8,000 and a 12%, and the third is an auto loan of $21,000 at 4%. Let’s also say that through your mortgage refinance you’ve been able to gain a savings of $175 per month.

Assuming you were making just over the required minimum monthly payment on your two credit cards, the time it would take you to pay them off completely would be twenty-three years (assuming you didn’t add anything to the balance over that time). On the other hand, if you wanted to put that $175 per month towards paying these cards off in a systematic manner, this is what we would suggest:

First, pay off the highest interest card while maintaining your regular minimum payments on the lower card. When you’ve paid off the first card, start applying the $175 to the second, plus the minimum payment you had been making on the first. By sticking to this plan you would be able to pay off BOTH credit cards in only a little more than four years. That’s a whole lot less than twenty-three! Consider how much money you’ll be saving in interest payments over those 19 years…

It’s pretty obvious that a Denver mortgage refinance can help your situation in the short term, but now you can see how much it can have an impact on your long-term financial health as well.