• Should You Pre-Pay Your Mortgage? • November's Home Value Improver • About Us

Should You Pre-Pay Your Mortgage?

To pre-pay or not to pre-pay, that is the question that keeps financial chat groups buzzing. Some people say that it doesn't make sense to lock money away to pay off a low interest, tax-deductible debt when you have the chance to earn more in the stock market. Others say that pre-paying your mortgage provides risk-free savings that are more reliable than the volatile stock market.

Is pre-payment right for you? The answer depends upon a host of factors including your age, other debt, savings, tolerance for risk and how long you plan on living in your home.

If you have 6-12 months of living expenses saved in an emergency fund, no high interest debt, max out your retirement savings, don't need the extra cash and want a risk-free return, pre-paying may be a smart financial move. If you are near the end of your career and don't want to draw on savings to pay mortgage expenses during retirement, it may be a particularly good idea to pre-pay.

If you decide to pre-pay, you should specify that your payment is a principal reduction. By applying extra payments directly to the loan balance, you pay down your mortgage faster. You save interest on the amount that you prepaid, plus you shorten the loan term. For example, a $5,000 lump sum payment on a 30-year, 4.5% fixed rate mortgage of $225,000 saves more than $13,000 in interest and slashes the repayment term by 15 months. Just keep in mind that only the duration of the loan has changed -- your monthly payments will remain the same.

There are three main ways to pay off a mortgage:

1. Lump sum: If you receive a sudden windfall or have accumulated savings, you may be able to use it to pre-pay your mortgage by making a large, single payment. Be sure to check the terms of your loan to make sure your mortgage doesn't have a prepayment penalty.

2. Biweekly payments: By paying half your monthly mortgage every two weeks, you'll end up making 13 payments per year and retire your mortgage faster. Many mortgage servicing companies offer a biweekly plan, but you may have to pay a one-time fee to switch payments to this system.

3. Rounding payments: Every little bit counts. If you just round up your monthly payment to nearest $100 - say from $963 to $1,000 - every month, your small extra payments can add up to big savings.

Want to know more? Please give me a call at 617-965-1236 or email me for information or help.

November's Home Value Improver

Last Minute Thanksgiving Decorating Ideas

If you're expecting a crowd for Thanksgiving but haven't had time to decorate, don't despair! You can do a lot with items right from your backyard or kitchen. Here are a few tips we gathered from around the Web:

Natural Fall Mantel
Gather pine cones, acorns, branches with berries and beautiful stones to create an eye-catching mantel arrangement.

Edible Table Decorations
Decorate the dining room and kitchen with pretty bowls filled with apples, pears, lemons, pomegranates and walnuts.

Get Creative with Candles
Wrap clusters of pillar candles with ribbons in rich harvest hues. If you only have tea lights on hand, carve a small circle out of pears and apples, insert a tea light, and voilá - beautiful candle holders!

Festive Greetings
Your front door sets the stage for your festivities. A simple twine wreath interlaced with berries, a garland twisted around a door knocker, or a cluster of Indian corn from the grocery store are simple ways to convey the spirit of the season.

Westchester Mortgage

November 2012

I love the simplicity of Thanksgiving. No costumes to make or extensive gift lists - just a wonderful time to enjoy a feast with family and friends and a chance to count our blessings.

I am deeply grateful for so many things, including the opportunity to work with so many wonderful people. At this time of thanksgiving, I want to thank all of you who placed your faith in me to finance your home, passed my name along to family and friends, or simply took the time to read this newsletter each month.

I hope you enjoy this month's newsletter and time with loved ones over Thanksgiving. Please let me know if I may be of service.

Best regards,
Debbie Siegel
Westchester Mortgage

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