Financal Tip

In the summer of 2007 I made a really stupid stubborn decision and bought a brand new car. Its a Ford Fusion which is a great car but now its worth less than I owe on it after paying on it for a few years. What I should have done is what my wife did and bought a used car. The most expensive miles you put on a car are the first 20,000 had I known that I would have bought a newer used car and would have been in a lot better situation than I am now. Then I could have had the car payed off by now and can be putting the extra money down on my house payment. But I didn't and now I have an expensive lesson that I can share with all of you all and maybe you can learn from my mistakes. This mistake wont brake me by any means but I would be progressing financially a little faster if I had went with a used car.

15 Year Mortgage VS 30 Year

I have lately developed a big man crush on Dave Ramsey. If your not familiar with Dave Ramsey he's the guy that cuts up credit cards and teaches people to get out of debt. The only debt that he thinks is okay is a home mortgage and he recommends putting at least 10% down and getting a 15 year mortgage. Most of my clients get a FHA loan and only put down 3.5% although its not ideal they do get a great interest rate and are able to take advantage of the current Real Estate market and get a great deal on their very own home.

If your in this position and you have a 30 year loan that you would like to nix. I would recommend paying extra payments or pay a little extra on each payment and pay it off quickly. Just making a little extra on your payment each month will knock years off your loan. When you do this make sure that you write out a separate check and put in the memo towards principle. If you don't do this the bankers will apply it towards the interest on the loan and you would have basically wasted the money.