More About Mortgage Math

Recently, I wrote about mortgage math and this article is another aspect of that math.

Over the years, I’ve observed that most people, but not all, know the approximate rate on their mortgage. They know because it’s usually their largest monthly payment obligation. Fewer know their auto loan rate and fewer still, know rates on their credit cards. That can be a costly oversight.

Per, auto loan interest rates vary from 5.98% to 6.5%, depending on term, and credit cards range from 13.91% to 18.19% depending on credit rating. Most people can barely remember a time when they didn’t owe on a card or two…or more.

With an auto loan and just two or three credit cards with perpetual balances, even if the rates are a bit lower than average, out-of-pocket, non-deductible interest cost can be substantial.

Refinancing a mortgage to a rate much lower than that of consumer debt, can greatly improve one’s overall financial picture…especially if the interest is deductible. Such a tactic is not for everyone, but, for those who make wise use of payment savings and avoid repeating similar debts within a few years, it can contribute substantially to increasing net worth.

Math is seldom subject to interpretation and math is the primary factor in determining whether or not such a plan works for someone.

If you would like to determine if it makes sense for you, please feel free to contact me. I’m happy to help however I may.

Joe Adamson Ofc: (408) 975-2400 x123

NMLS #234559 BRE #01104088

Mortgage Magic NMLS #331340   BRE #01104088