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.
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