Got Foreclosure! - Blog

Few creative ways of boosting affordability are as effective as a lower purchase price.

You may have thought so, but take a look at these charts to get a real feel for how large an impact the purchase price actually has on affordability, when compared to the effect of a wide range of interest rates.

However, in our credit addicted society, there is one great “creative” approach to home financing that could even solve some problems of seemingly overleveraged properties. Take a look at the “Living Free and Clear” approach of paying off your mortgage in 8 to 12 years on a 30-40 year loan - without making extra payments, or negotiating the debt.

For example: On a loan amount of $600,000 and an interest rate of 7.5% you pay interest of just over $900,000 over the life of a 30-year loan (in addition to paying back the principal of course). So, including principal and interest that home costs you $1,500,000.

Using the Living Free and Clear program you could pay off this loan in 12 years or less, and pay only about $500,000 (or less) in interest. That reduces the total cost by $400,000 to $1,100,000.

The possible savings in interest dwarfs any potential downturn in the real estate market. - Just a thought…

P.S.: Of course, I advocate that you’d do BOTH: Buy a great bargain home with GotForeclosure.com (you can create your VIP buyer profile here to get going), AND use the Living Free and Clear method to pay it off quickly!