Mortgage Magic II

We were asked yet another question about mortgages that I'm sure would really help anyone who knew the answers. Now let's get ready to rumble!

Dear Munnybagz,
I was just wondering if you could tell me how to negotiate a better mortgage, because I am sick of always having to pay off interest instead of the base mortgage. Please help me!
Mad at Mortgage

Dear Mad,
Although you may hate your mortgage rate, you have to realize that mortgages have the lowest interest in comparison to all the other loans. But there are a few tricks and tips that can help you get the best deals.

• hunt around for mortgages at different banks or go to websites that compare mortgages.(such as mortgageshark.com)
• when you're talking to a bank about a mortgage and you're not sure whether or not you're getting the best rate, ask them what they're best rate is, because you found a bank that gives a very good mortgage rate.
• remember, banks always make money off your mortgage, no matter how little they charge. But the higher mortgage rate, the more they make, so if you tell them that another bank has 4.5 %, they will try to go better than that to get your business.

That should help you a little bit, Mad, and anyone else who wants a better rate. Stay tuned for our next episode, and send in your questions!

Munnybagz

My Mortgage Magic - Make the Money Appear Again!

No, no, this is not about how to get a rebate on your mortgage, but it is a clever little trick that really brings in the statement, " pay yourself first!". Well, what I've figured is that after 20 years, people are quite used to paying maybe 1,000 dollars a month on their mortgage. So what if they continued to do that into a savings account? That's an extra 12,000 dollars a year you're saving! So lets say that once you've paid off your mortgage, you were looking forward to opening up a little more cash flow. So let's say you only paid 10,000 dollars a year. If you continue to do this for 10 years, at a 10 percent return rate, here's what you would end up with.
The numbers, in order, are: year, annual investment, earnings and ending balance.
1 $10,000 $1,000 $11,000
2 $10,000 $2,100 $23,100
3 $10,000 $3,310 $36,410
4 $10,000 $4641 $51,051
5 $10,000 $6,105 $67,156
6 $10,000 $7,716 $84,872
7 $10,000 $9,487 $104,359
8 $10,000 $11,436 $125,795
9 $10,000 $13,579 $149,374
10$10,000 $15,937 $175,312

I could go on like this for I don't know how long, but I'm bored of making a chart with tabs and spaces, so I'll do it some other time. So there's the amazing ways of paying for a second mortgage without having a second home!

Banks- Gaining Interest Rather Then 10 Cents

I remember a time when i had a mere 85 dollars in my bank account, and every month, when i would collect interest, I would get 1 cent every month. Now I obviously have a lot more money in my account, but I’m still getting very low interest. I know a bank that would give me a much better return, but I’m just too lazy to go there. There’s no excuse for you not having enough time. If i had taken an hour or two to get a better account, i would have gotten at least 10 percent of my money in interest. So even if you’re quite happy with your current bank, it’s always a good idea to look around for some that pay better interest. And before you open an account, make sure you check for any fees whatsoever! Some banks can actually have you LOSING money in a savings account! Check out all your options for an account to hold money. GIC’s are really good for kids who don’t want to spend their money and are only interested in making more. They give a lot more interest in a much shorter period of time. But if you want constant access to your money, a GIC is not the option for you. They have a minimum amount of time until you can take your money out, which is normally 6 months. And if you’re just a kid with not much money or you’re looking for an account to hold your only money and you can’t afford to lose it, don’t put it into an account with a risk factor, no matter how low it is. Remember, taking loans out of banks is a sin unless mandatory. Rates on bank loans can cause blindness, paralysis, or even, in extreme cases, death! (just kidding) Banks don’t make money by giving it away. The loans they make interest off of need to make more interest then they are paying to customers!