Did you know? Every mortgage payment is a form of savings because it increases the amount of your home that you own, known as the “equity” in your home. Renters are not able to build equity with their monthly payments.
The great news is that, if the interest rate on your student loan is low (below 8%), it doesn’t have to be paid off before you start tackling longer-term goals like buying a home or saving for retirement. Instead, you can balance paying off your student loan debt vs saving a down payment for your home by tackling both simultaneously.
For many of us, “home” means sanctuary, family, the place where we replenish ourselves, and feel safe and grounded. For this reason, when the time comes for us to choose and buy our own home, the decision is often deeply emotional – or even impulsive. With everything else that “home” means, however, it is also one of the biggest investments you will ever make. This means you must enter into it rationally, and with care.
As we enter the final 10-20 years before retirement, the equity we have in our home often represents a large part of our retirement savings. To make the most of this hard-earned asset, it’s important to make thoughtful decisions about our mortgage and home ownership in general. We may also need to challenge common assumptions – what’s right for one homeowner approaching retirement may not be right for another.
If you’re thinking of refinancing your mortgage, but wondering what’s involved and how to negotiate the best deal as painlessly as possible, here’s what you need to know. Good news: The process is probably simpler than you think.