|
2) Mortgage Options
| 30yr vs. 7/1 ARM |
|
A mortgage loan can be a valuable financial tool! Compare a traditional 30-year fixed rate mortgage with a 7/1 Adjustable Rate Mortgage (ARM) to see the financial possibilities!
|
|
TRADITIONAL |
COST-SAVING
PRINCIPLE REDUCTION |
|
$240,000 30-Year Fixed |
$240,000 7/1 ARM |
| Interest Rate |
5.000% |
4.375% |
| Loan term |
360 Months |
360 Months |
Save
$90/Month! |
| Monthly Payment |
$1,288 |
$1,198 |
 |
|
Saving $90/month with Cost-Saving option. But instead of pocketing the difference, add it to the monthly payment to reduce the principle. look below to see what happens after 5 years!
|
|
AFTER 5 YEARS....
|
|
TRADITIONAL |
COST-SAVING
PRINCIPLE REDUCTION |
| Total Principal Paid |
$19,611 |
$27,662 |
| Total Interest Paid |
+$57,691 |
+$49,635 |
Same total
payments! |
| Total Payments |
$77,302 |
$77,297 |
|
| Original Loan Amount |
$240,000 |
$240,000 |
Principal
reduced by an
extra $8,056! |
| Total Principal Paid |
$19,611 |
$27,662 |
| Remaining Loan Amount |
$220,389 |
$212,338 |
|
| Total Interest Paid |
$57,691 |
$49,635 |
|
$8,056 less
interest paid! |
| Loan Payoff Term |
30 years |
26 years |
|
Loan term reduced
by 4 years! |
|
