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Just be careful about what you find online, because there is a lot of information out there and a lot of it’s accurate and maybe a lot of it isn’t, so be careful Colorado Springs Mortgage.
Recording: Broadcasting live from the Koala Studios in Tulsa, Oklahoma, you’re listening to The Steve N Tyler Show.
Steve: I think it’s time for a revolution, Tyler.
[background music]
Steve: Another advantage of loans with shorter terms, Tyler– this is going to blow your mind. Everybody wait. Ready? This is going to blow your mind. You pay your balance off quicker.
Where’s the bomb button? I need to drop that bomb. I need to drop that bomb. Seriously, you pay your balance off quicker. That’s kind of a no brainer, right? Here’s what I tell everyone that’s getting a mortgage. “ShouldI get a 15, should I get a 30?” if I was telling Marshall here in the studio, Marshall said, “Steve, should I refinance and go to 15 year?” First of all, can you afford it? If you can afford it then absolutely you should do it, because why would you want to pay for 30 years?
There’s a couple of reasons why I give everybody, Tyler, is because you’re going to build equity faster. When you do go to sell your house you’re going to have a lot more equity, which is going to do what? Allow you to have more money for a down payment, maybe on your next house. You’re going to ensure that you’re not going to be upside down on your house because a lot of people will do, maybe a 15 or a 30 year fixed FHA. Maybe they’ll do a USD loan, maybe they do a VA loan.
At 100% there’s no down payment. You get two or three years into that loan, how much interest you think you pay versus how much principal, Tyler?
Tyler: Two. Not much at all.
Steve: Not much principal at all. If you get three years down the road on a 30 year fixed, you might kind of be stuck if you did 100% loan. Nothing wrong with doing an FHA loan with three and a half percent down. But you’re doing a 30 year, in two-three years you’ve got another kid, your family size has changed a little bit. You’re not going to have, you cannot plan on having a bunch of cash from the sale of the house, and really if you’re fifteen year, you’re not talking about having a bunch of cash either but you’re going to have a heck of a lot more than when you do a 30.
That’s one of the biggest reasons, obviously it’s just because you’re going to build equity faster. You’ll owe less on your house. You’re going to pay less interest, you’re going to reduce your principal faster. You’re going to have more equity in your property that you can use if you decide to sell it and get a new house. You’ll have a big down payment that you’ll be able to make. We’ve said this before. You can literally, side by side in amortization schedule. This Bob that I was telling you about, we met with yesterday, Tyler, I sat at his desk at his office and went through this loan estimate with him. He looked at me and said, “This is a no-brainer.” I said, “Yes, it’s a no-brainer.” Because in his case, his insurance alone, now this is a very important point, his insurance– Now he’s got a million dollar house. But his insurance alone is $8,000 a year. Okay? He’s paying $8,000 a year for insurance. We were able to get him a much better insurance policy, with the same coverage, for $5,200 a year. Isn’t that what it was, Tyler:, 52, 53 hundred bucks?
Tyler: Yes. Something like that Colorado Springs Mortgage.
Steve: 53 hundred bucks. Take three grand, that’s 35 hundred bucks. What’s 3500 divided by 12? Three hundred bucks a month? Basically, 3600 would be three hundred bucks a month.
His payment is already going to go down by 300 a month, because he’s changing insurance. Guess what? His new mortgage payment went up less than $100 a month, and he took a $390,000 loan from a 30 year down to a 15. And he lowered his rate by about a point and a half, little bit more than a point and a half. When you’re already in a loan, and you’ve already done a 30, you’ve already done 20, already done 25, whatever it is, there’s a great opportunity, especially right now when rates are low for you to convert that 30 over into a 15.
That’s what I would do. If I was you, I would start out in a 15. You know, there’s some wisdom to maybe buying a little bit less house and just being able to afford that 15 year, instead of doing a 30. What do you think, Tyler?
Tyler: Yes. For sure.
Steve: That’s all you have?
Tyler: Makes a lot more sense.
Steve: That’s all Tyler has, guys. “For sure. It makes sense.” Hey, I’m just going to sit over here while you come up with something, and eat my doughnut holes. I’ve brought doughnut holes today, and glazed doughnuts, and we brought Marshall a Superman doughnut- we call it “The Supermarshall Doughnut”, just so we can keep Tyler up.
So I don’t have to play this song, or this sound.
Recording: Tyler, are you awake? Wake up, Tyler.
Steve: I’m happy to report he hasn’t gone yet. Listen, if Tyler is yawning in the studio with my excitement, I can’t imagine what you people listening are dealing with right now. I can’t even imagine. It’s got to be so boring. “Oh, my God. Wow, Currington. My payments are going to go down. I’m so excited. Please talk for 20 more minutes about that. Oh my God, I can’t wait.” Not really, though.
Recording: This is stevecurrington.com and the Steve N Tyler Show. Go to getkoalified.com.
[music]
Steve: There’s nothing wrong with this music. Guys, I have to play some music so I can eat my doughnut holes. I can’t talk the whole time. I’ve tried to set Tyler up. He won’t talk. So we’re just going to play music and we’re going to talk about going from a 30 to 15. I’m not even going to trust what the rest of this says, because they can’t even do math on a 30 year mortgage.
Tyler: No. A lot of people too, they get into different financial situation after they’ve bought their house. They have to get into that 30 in the beginning, or feel like they need to, so they can afford the house, if they want. Maybe it changes, maybe you can afford a little bit more. Perfect time to refi. Even if it goes up a little bit.
Steve: And here’s what I’m saying. Look, I’m not judging anybody that does a 30 year. You do what you need to do. I’m just suggesting that you should look at a shorter term, and you might be surprised what you can afford. Right? Because if you’re buying a reasonable sized house, let’s say you’re doing a 250,000 loan. It’s not going to impact you as much as when I did mine. Let’s say you’re doing a 400,000 loan. It’s not going to, and so here’s what it comes down to. My payments could be 250 bucks more month in that scenario. We talked about it, 125. Do I have $250 a month in discretionary income? Sure.
Tyler: You can find it somewhere, maybe Colorado Springs Mortgage.
Steve: That’s what you have to ask yourself. Is there something that you would sacrifice so that you can pay your house off in half the time? I don’t necessarily subscribe to–
Dave Ramsey has a pretty good financial peace course, like our church is doing right now, or was doing. It’s funny because people get behind these financial gurus, and you know what the financial gurus say? “Spend less than you make. Limit the amount of interest you pay. Save money instead of spending it.” So it’s not like Suzanne or Susie Orman. You know what her big thing is? “When you buying stock, buy it low and sell it high.” It’s like, “Oh, really? No joke. I didn’t know you have to do that.”
My point is it’s not rocket science. It’s just a matter of what you might think is acceptable and what the norm is. I think a lot of people just get a 30. Right? Just get a 30 year, because that’s what they get. You know? It’s what it does.
Recording: For more information go to getkoalified.com. That’s G-E-T-K-O-A-L-I-F-I-E-D.com.
Steve: Guys, you’re listening to us, Steve and Tyler, The Steve N Tyler Show. I’m hoping you found us on our website, stevecurrington.live, but you can also find us on iTunes. We are, as we said in the beginning here, on episode number– What are we on, 71. So there is a lot of information. All these podcast are anywhere from, say 12 to 20 minutes long. They are, I think, pretty informative, if you need to know some information about the mortgage business, so thanks for listening today. That’s all we got.
Recording: Tyler, are you awake? Wake up, Tyler.
Steve: And Tyler yawned right there at the end, so there you go.