Ch.11 Pay off the home mortgage Flashcards
what can happen if you aren’t careful in the sixth step?
“the good enough” can easily become the enemy of “the best”
what happens to people typically on step 6?
they fall short and lock up
why are tax deductions no bargain?
with the amount of risk that comes with it and the low outcome its not worth it
big beta=
big risk
what are capital gains rates?
a tax paid by an investor upon selling their asset, based on the amount by which the asset appreciated during the time it was held
once risk is factored in what does it do to the opprotunity?
it downsizes the opportunity
what should you do in order to make sure you don’t fall prey to your weaknesses?
know where you are weak and take action to make sure you don’t fall prey to your weaknesses
should you pay something off over the course of a longer or shorter amount of time? why?
shorter; the shorter amount of time the better because you save over time
when is the best time to refinance?
when you can save on interest
what does it mean to refinance?
replacing an existing loan with a new one, typically to get a better interest rate, lower monthly payments, or change the loan terms
what are points/ origination fees?
are fees charged by a lender to cover the costs of processing a mortgage application, underwriting the loan, and preparing the necessary documentation
what is the Adjustable rate mortgage (ARM)?
Unlike fixed rate mortgages that have an interest rate that remains the same for the life of the loan, the interest rate on an ARM will change periodically
it’s born to transfer the risk of higher interest rates to you
what is a home equity loan?
also known as a second mortgage, allows homeowners to borrow money by using the equity in their home as collateral, typically in a lump sum with a fixed interest rate and repayment schedule
what is equity (home)?
Equity is the amount your property is currently worth, minus the amount of any existing mortgage on your property
What’s the most important thing you can do in order to save money on college?
scholarships!!!
