One of the most important principals of creating wealth is to own your own home. The average family pays full retail price for their average home without thinking about the enormous financial consequences of their decision.
Your house will be the BEST or the WORST financial decision of your life!
Let me show you how to pay wholesale prices for your next house.
It's easy when you know how.
Let's take a simple example:
A $100,000 house with a fixed rate mortgage of 8% will have mortgage payments of $733.76 for 30 years or 360 months for a total of $264,155. In other words,
$100,000 principal payments
$164,155 interest payments
$264,155 total payments for house
Technique 1 - Never, EVER pay retail for Real Estate
There are 9 ways to find bargain properties that you can buy at wholesale prices.I go into detail on these 9 ways in my new book, Multiple Streams of Income.
Using one of these methods, you set a goal to buy your next house at least 20% below market. I’m assuming that you’ll also buy it with little or no money down using the ideas in my all time best selling real estate book, Nothing Down. Therefore, you’ve saved $20,000 by using patience and some bargain hunting skills.
Technique 2 - lower price gives you an immediate lower monthly payment
Not only will you save an immediate $20,000, but look at what happens over thelife of the loan. By buying right, your new loan will be $80,000 instead of$100,000. This will lower your monthly payments from $733.76 to 587.01. That'san immediate monthly savings of about $150. Not bad. Over 30 years, thisamounts to $52,830 in interest savings! Now you can see how just a few smartmoney decisions can have enormous impact on your financial future. But let's not stop there.
Technique 3 - Negotiate the lowest interest rate!
Is it worth the hassle to shop around for a ‡% to 1% lower interest rate?Let's run the numbers. If you could get your mortgage for 1% less, your mortgage payments drop to $532.24...or about $55 less per month. Over 30 years this amounts to almost $20,000! Is that worth a few extra hours of shopping? Every 1/2% drop in interest saves you $10,000. Seller financing can be even more exciting than bank financing.
Technique 4 - Own your home debt free in half the time!
One of the most popular loans today is the 15 year mortgage. There are even 10 year mortgages. I don't recommend either of these loans. I recommend instead that you get the traditional 30 year loan...for the sake of flexibility...but that you voluntarily increase your monthly payment to the bank in order to payoff your loan much faster. For example, the previous example had monthly payments of $532 on an $80,000 mortgage over 30 years. By increasing your payments by only $187 per month, you will pay off that loan in 15 years instead of 30. And save yourself those last 15 years of payments. This will save you $95,000!
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