Senior tips on mortgages
Although the monthly payment may be higher, seniors can save tens of thousands of dollars in interest charges by shopping for the shortest-term mortgage they can afford. On a $100,000 fixed-rate loan at 8% annual percentage rate (APR), for example, they will pay $90,000 less in interest on a l 5-year mortgage than on a 30-year mortgage.
They can save thousands of dollars in interest charges by shopping for the lowest-rate mortgage with the fewest points.
On a 15-year, $100,000 fixed-rate mortgage, just lowering the APR from 8.5% to 8.0% can save seniors more than $5,000 in interest charges.
To find out about rates call at least six lenders for information about their rates (APRs), points, and fees.
Then ask an accountant to compute precisely how much each mortgage option will cost and its tax implications.