CNC Mortgage Blog

A lot is being said about boosting the economy and that it is up to the consumer to participate by spending more. I caution you, continue to save. Do not spend unnecessarily or frivolously. For many years we were told that the savings rate in the US was too low because we were spending too much. The Chinese were saving for a long time, now they own a very large portion of US government debt.

How can you save? Of course I am an interested party, take a look at your mortgage. Some simple math. Suppose you have a $200,000 mortgage. If you can save 1% in interest by refinancing, that is the equivalent of $2,000 in interest, if you plan to stay in the house seven more years, you will save close to $14,000 in interest. Suppose the closing costs on the refinance were $4,400 you are ahead $9,600 in seven years and your monthly payments will have gone down at least $166 the month after you refinance.

Other thoughts:

Do you really need a new flat screen television? If you are going to put it in the same corner where you have another set now, you still have wasted space behind it.

What about new cars? When you lose 10% of the new car’s value when you drive it off the lot, consider buying a used car. Buying a used car is a hassle, time consuming, risky and is not quick. But you might save more than $4,000 by shopping around, upwards of $20,000 if you compare to a new car. Go to the websites for used cars, carsoup.com, craigslit.com, cars.com etc and see prices for used cars. You would be surprised.

Look at the interest rate you are paying on your credit cards. Call the provider and ask to have the rate reduced, or find out what you need to do to qualify for a rate reduction.

Keep in mind that during these tough times that you are the person who needs the most stimulus!