After having just celebrated our country’s freedom this 4th of July, why not also think about achieving greater financial independence? Your home is likely your biggest investment and also your biggest expense. Consider these steps to free up some cash flow, courtesy of Vera Gibbons, a financial journalist and Zillow.com blog contributor:
Refinance your mortgage at a lower interest rate
With mortgage rates at historic lows, consider refinancing your existing loan — particularly if you’re planning to stay in your home for at least three more years and can lower your current interest rate by a half to three-quarters of a percentage point.
Shorten your loan term
Current low rates make it easier to absorb higher monthly payments that accompany shorter-term mortgages. You’ll pay less interest on a 15-year mortgage as opposed to a 30-year, for example, and build equity at a faster rate.
Switch to bi-weekly payments
By making 26 half-payments instead of 12 full payments — applied directly to your principal — you will chop off about 6 years on a 30-year mortgage and about 3 years off a 15-year mortgage.
Make extra principal payments
Extra payments towards the principle will reduce your interest and shorten the length of your loan. Just make sure you won’t have to pay prepayment penalties.
Read the complete article at http://www.zillow.com/blog/2012-07-04/4-steps-to-financial-freedom/