Twenty percent of the country is having financial difficulties with job and home losses, according to Greg Heberlein, the financial commentator at KPLU. The news has been so focused on the difficult economic situation and in real estate on short sales, foreclosures, declining home values.
What about the other 80%? We often forget about what’s happening with the other 80% of the population. These people need to think wisely and make some solid financial decisions. If you own a home, Greg Heberlein recommends making an additional mortgage payment each year. You can drastically cut down the time you’re paying your mortgage, PLUS save a lot of money. We’ve heard this before, but it hasn’t been mentioned in a long time. It’s good financial advice.
Here’s a few key thoughts from his talk:
- One payment a year can lower a 30 year fixed mortgage by as much as 8 years.
- One payment a year can lower a 15 year fixed mortgage by almost 5 years.
- Despite the tax deduction, you’re still better off being as debt-free as possible.
- The last 3-6 years of a mortgage payment have such a small interest amount, it often doesn’t allow for a deduction anyway.
- By being as debt-free as possible, it increases one’s cash flow.