Mortgage Investment and Interest Rates
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
Understanding Mortgage Investment and Interest Rates
Overview
As a homeowner with a mortgage and a little extra money each month, you might wonder where to invest it. Ideal investments are safe, offer better returns than bond funds, compound monthly, and remain accessible. Let's explore an option that fits these criteria and could potentially enhance your financial health.
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Reinvesting in Your Mortgage
Instead of traditional savings or investments in stocks, bonds, and mutual funds, consider reallocating some of that money to pay down your mortgage faster. This approach can significantly reduce interest charges over time.
The Traditional Mindset
Many of us were taught to save by depositing money in the bank, where accounts are insured by the FDIC up to $100,000. However, bank savings accounts and CDs typically offer low interest rates around 5.5%, and this interest is taxable.
A New Perspective: The Mortgage Advantage
Redirecting your investment funds to your mortgage can be an effective strategy. By paying a little extra each month, you chip away at your principal, accelerating your repayment schedule.
Example of Savings
Consider a fixed-rate mortgage of $100,000 with a 30-year term at 7% interest. By paying an extra $25 each month, you could pay off your mortgage 39 months sooner. This approach would save you approximately $17,992 in interest, amounting to tax-free growth of $55.83 per month on average, or an annualized return of 223%.
Additional Opportunities
If you’re curious about reducing your mortgage further, explore current mortgage rates online. Websites like [Property Shares Internet](http://www.propertysharesinternet.com) provide valuable resources for finding competitive rates. While exploring other investments remains an option, reinvesting in your mortgage is a worthy consideration.
Conclusion
Enhancing your financial well-being may be as simple as investing in your mortgage. This method reduces interest payments, offers significant returns, and ensures your money works efficiently for you. Whether you're considering traditional investments or focusing on paying down your mortgage, make informed decisions to secure your financial future.
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Happy Investing!
Anthony Simon
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