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Advantages of Making Extra Mortgage Payments

A house is the biggest purchase most people make in their lifetimes. The mortgage they obtain to finance that house is likely the biggest single investment they will ever make.

Image showing a large home and yardEven with the popularity of shorter terms and creative loans, most mortgages are still the tried-and-true 30-year conventional variety. First-time home buyers staring down the gauntlet of 360 payments spread over the next three decades of their life can feel like there is no end in sight. And for those who dare to look at their amortization schedules, that no-end-in-sight feeling can be even greater.

But there is a way to get ahead of the game: making extra mortgage payments.

Why It Makes Sense to Make Extra Mortgage Payments

Why does it make sense to make extra mortgage payments? Put simply, you will save significant amounts in interest. Most mortgage contracts allow borrowers to make extra payments, and they allow all of the extra money to be applied to the principal amount of your loan. That means you are paying down the real amount of the loan – the money you borrowed – faster. Because the interest part of your loan is calculated on the amount of principal you still owe, reducing your principal amount greatly reduces the interest amount.

According to the web site interest.com, “a $200,000 30-year home loan with an interest rate of 5% would cost $186,512 in interest with the traditional 12 payments a year. Make the equivalent of 13 monthly payments every year, and the loan will be retired in 26 years and you will pay only $153,813 in interest — a savings of $32,699.”

That’s nothing to sneeze at.

How to Make Extra Mortgage Payments

When it comes to making extra payments on your mortgage, there are a variety of tactics that can be used. Each has the same goal in mind: to reduce the principal and, thereby, reduce interest.

The tactics for making extra mortgage payments include the following.

Accelerated Payment Schedule

Rather than making your mortgage payment once per month, or the equivalent of every four weeks, you could make payments every two weeks. This biweekly payment plan results in 26 half-payments, which is the equivalent of 13 full payments for the year. The extra payment each year can shave off eight years from a 30-year loan.

Extra Principal with Each Monthly Payment

If you’re looking to chip away at your mortgage at a more gradual pace, pay a little extra each month. Check with your lender to make sure the additional payment goes directly to the principal. Depending on how much extra principal you pay, you could shorten your loan significantly. And, best of all, because your are shortening the loan duration, you will save significant amounts in interest.

One Additional Payment Per Year

Another tactic is to make one additional, principal-only payment per year. Some people who do this use their income tax refund for this purpose.

One Additional Payment Per Quarter

Making an additional payment each quarter results in four extra payments per year. On a $220,000, 30-year mortgage with a 4% interest rate, you would cut 11 years off your mortgage and save $65,000 in interest.

Lump-Sum Payment

Applying a lump-sum payment toward your principal balance when you come into extra cash — a bonus at work, a sizable inheritance — can shave time from your mortgage. This approach isn’t as consistent as some of the other methods, but, if the lump payment is large enough and depending on where you are in your timeline, it can eliminate many years.

This blog post was written by experts at Mortgage 1. Michigan Mortgage is a DBA of Mortgage 1.

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Hometown Highlights: Dr. Tabatha Barber Duell

In a world full of buzz words like gut microbiota, leaky gut, diseases of affluence, mind/body connection, functional medicine, mindfulness, phytochemicals, detoxification… it’s no wonder that we are all confused about how to live our best life.

Enter Dr. Tabatha: “Take care of yourself! Doctors orders!”

Dr. Tabatha Barber Duell’s passion to encourage women to live their best life through a functional medicine approach to health is nothing short of inspiring.

She believes that the best “medicine” is for physicians to spend time with their patients, listening to their histories, mapping their personal timeline, and looking at the interactions among genetic, environmental, and lifestyle factors that can influence long term health and complex chronic disease.

As an OB/GYN, she has been working with women through issues that face them as they have their first baby, to women going through menopause and learning how to cope with all of the changes that come with both.

Tabatha’s passion over the past 15 years has been delivering babies for hundreds of patients in West Michigan. She maintains that passion today, with an added dose of care that goes beyond the typical Doctor/patient relationship.

As Tabatha has grown and evolved over time, her course work, readings, and patient care have brought her to a place where she recognizes that women need to be empowered so they can advocate for themselves through movement, mindfulness, and diet each and everyday.

She wants to dig deeper with her clients and our community to see stronger, healthier women who thrive in all areas of their lives.

When asked if she could do anything in the world professionally right now what would it be? Without a second’s hesitation, she answered enthusiastically “I would open a women’s wellness center that incorporates Western and Eastern medicine: with meditation, accupuncture, herbal therapies, counseling, movement, mindfulness, nutrition and aesthetics!”

Giving women the tools to thrive through a mind, body, spirit approach to well being is what Dr. Tabatha would like to see more of in West Michigan and all over the United States.

Tabatha’s training as a DO, her work in Functional Medicine, and her personal struggles with back pain, and an autoimmune disease have given her a personal perspective on how lifestyle changes can make a huge difference in mental and physical health. She has been promoting “52 Weeks of Growth” using social media platforms to promote habit shifts. She teaches workshops through NOCH on related health issues, has been a speaker at the BE event, and has recently written a book “From White Trash to White Coat” that is a fictionalized story of her life.

If you are interested in learning more about Tabatha’s journey into Women’s Wellness, you can hear her speak at this year’s Be Event, Saturday, September 14, from 1-5 p.m. at the Frauenthal Theater. Tickets go on sale June 1.

Image showing a living room.

Mistakes to Avoid When Shopping for a New Home

Shopping for a new home can be one of the greatest experiences of a lifetime! When you venture out to purchase a home, make sure you set yourself up for success and an amazing experience.

Avoid these common mistakes:

  1. Not having your financing in order when you are ready to make an offer. It is critical to have a pre-approval from a trusted lender. Especially in a low inventory, competitive market, the buyer who has financing in place is ready to write the offer and “win” the home. So, don’t put yourself in the position of falling in love with a home that you aren’t able to bid on quickly!
  2. Not taking the time to educate yourself by window shopping and researching the market. Noel Berg with At Home Realty says, “A critical step in home buying is going to Open Houses, driving through neighborhoods and having a Realtor who educates you on home values so that you feel comfortable and confident when you find THE home! The more properties you can visit, the more confident you feel making an offer!”
  3. Submitting a low-ball offer. Make sure you look at all of the variables before making a low-ball offer. How long has the home been on the market? If it’s a seller’s market, it’s probably off the table. Does the house need updates, making it over priced? Your Realtor can craft an offer that won’t be too aggressive or offensive in the current market.
  4. Including too many contingencies. Contingencies are basically “walk away” clauses. It is important to protect your own interests, but, typically, the more contingencies in your offer, the less enthusiastic the seller may be to deal with you, especially in a seller’s market. Your Realtor will guide you as to which contingencies are the most critical to protect your interests.
  5. Using the seller’s agent. A real estate agent’s loyalties and responsibilities change depending on the transaction. A seller’s agent works for the seller to get the highest amount of money in the shortest period of time. Their fiduciary responsibility is to the seller at all times. The buyer’s agent works with the buyer to teach their clients about the market, to show them houses, and advise them when it comes time to make an offer and negotiate with the seller.
  6. Blindly listening to friends and family members. Though your friends and family have your best interests at heart, unless they are a Realtor, they are simply not experts; often times offering inaccurate and incorrect advice.
  7. Buying a home that is too expensive. Many buyers get their pre-approval letter and set out to look at houses at the top of the price range without thinking it through. It is important to work through a budget, and evaluate your spending habits and the increased cost of owning a home.
  8. Letting your emotions guide you. Purchasing a home will likely be one of the biggest and most important purchases in your lifetime. So, it makes sense that there will be emotions, concerns and questions weighing on you during the process. Make sure you take the top seven guidelines seriously so that you are empowered by logic, market awareness and professional advice!

A professional lender and Realtor will guide you home with confidence and authority.

Image showing a customer using an ATM.

Finding it hard to save for a down payment?

Making small changes to your habits can make a big difference in your ability to save. Saving takes some pre-planning and discipline and a well-executed strategy.

Here are a few ideas to help you save.

  1. Take it right out of your paycheck and transfer a fixed amount into a special savings account. This is probably the most convenient and practical way to save. Take it right out of your paycheck. Make sure you set up an automatic direct deposit into a savings account that is earmarked for your down payment only. Commit to using this money for a down payment and no other purpose.
  2. Take advantage of special programs including down payment assistance programs. Check with your lender to see what type of down payment assistance programs they offer. See if you qualify with the FHA, the U.S. Department of Agriculture Rural Housing Service and the Veterans Administration. Also, check out local housing authorities, such as MSHDA. If the lender doesn’t offer these programs find a knowledgeable, reputable local lender that specializes in these programs.
  3. Skip vacations for a year. Make if a fun goal to forego any large vacations. Plan a staycation, or a night somewhere, and focus on how great it feels to get closer to your goal.
  4. Lower your expenses. Look at your budget to see what small things you can cut per month. Cut out a coffee per week, make your own pizza on Friday night. If you don’t have a budget, sit down and make one and evaluate it quarterly to see how you are doing. Shop at Costco, Aldi and other discount stores.
  5. Sell your stuff on EBAY or Craigslist. If you have Designer clothes, furniture, antiques, art, gaming devices that you barely use, consider selling them and putting the proceeds in your down payment account.
  6. Start a Side Hustle. Commit to a temporary period of time and put all of the money in your down payment account.
  7. Ask for a raise. If you’ve been thinking about a raise, and feel you deserve one, now may the time to talk to your superior about the value you bring to your organization.
  8. Use gift money. Parents or relatives may be able to gift money to help out a first-time home buyer. Gifts can come from your family, spouse or a domestic partner. Be sure to include the amount of the gift on your loan application and check with your lender as the best way to obtain and track this. To be recognized as a “gift” the donor will have to sign a gift letter saying there’s no expectation of repayment, interest, or anything else.
  9. Be wise with your money. Think about your purchases before you make them. Are there cheaper brands at the grocery store that are the same quality as the premium brand? Are there restaurants that offer the same quality and experience that are a little less expensive? Do you need another tan sweater? Be mindful about your purchases and avoid impulse purchases.
  10. Use your tax refund. Set aside a percent of your tax refund to deposit into your down payment savings account.

For more ways to save for a down payment, reach out to our team at Michigan Mortgage. We’re here to help in any way we can.

Image showing a happy homeowner!

Success Story: Bianca and Paul Urban

In the mortgage business, we help our clients achieve a small portion of the “American Dream.”

Landing your dream job, home ownership, getting married, having children – memories that will last a life time.

For Bianca and Paul Urban, their dream began to take shape in 2016.

“I had been renting for about five years and Paul had purchased his first home a few years prior,” Bianca said. “We got engaged and started putting our lives together in the Spring of 2016 and together decided to put his home up for sale with the goal of purchasing a new home in early 2017.”

Bianca is a hairstylist in Holland and Paul is a truck driver out of Byron Center. Together, they decided that the Zeeland area was the perfect place to call home. Their goal was to be settled before tying the knot in 2017.

“Our Realtor is a good friend of ours – Nicole Kayser with Five Star,” Bianca said. “She set up our connection with Mark and the team at Michigan Mortgage.”

“Nicole was great! She was there to answer any questions and we are so grateful she led us to working with Mark. They made a great team and were in constant communication to help us reach our goal of home ownership.”

Bianca and Paul knew what to expect while working with Nicole, but weren’t sure about the financial side of things. This was their first big purchase as a couple, so they relied on Nicole’s recommendations.

“It was easy for us to trust Mark with Nicole’s recommendation and how personable he was,” Paul said. “His ability to help us find the best rates without having to shop around and apply at several different places was a bonus.”

“Working with Mark was honestly super easy and comfortable from the first meeting,” Bianca added. “It can feel awkward or intimidating when going over all your finances with someone and we never felt that way through this entire journey. Mark was there to answer any questions we had and was there at each step of the process.”

“He genuinely cares for his clients and wants to see them succeed.”

They found their dream home on the first day of their search, wrote an offer contingent on the sale of Paul’s home and it all worked out as planned.

“Our expectations were definitely met with our situation to sell and buy at the same time having Mark and Nicole guide us through the process,” Paul said.

“I always recommend getting in touch with Mark anytime I hear a friend of a client of mine in my chair start to think about buying or selling their home,” Bianca said. “For us, Mark has become more than a mortgage lender. He and his family are friends we are thankful to have!”

Headshot of Julie

Hometown Highlight: Call to Lead Coaching

With a radiant smile and exuberant welcome, Julie Stenberg exudes confidence with equal parts caring.

As a life coach, Julie helps people create a “Go For It” life and business. Julie’s goal is to guide people back to life.

When you meet her, it is obvious that Julie is living out her purpose, using her gifts and talents to impact lives in a beautiful and positive way. With multiple careers, three universities, John Maxwell Coaching and Leadership Certifications, and several years of coaching under her belt, Julie brings a unique perspective and varied skill set to her clients.

Whether teaching Kindergartners Spanish, teaching Shakespeare to gang members, coaching participative management Toyota-Production-System style, Julie is inspired by the human spirit. She is passionate about serving the people whose spirit is a little broken, underdeveloped and sometimes just lost.

“It breaks my heart to see people mired in the circumstances of life and never feeling they have the ability to change their situation,” Julie said.

Like so many successful people, Julie believes that everyone benefits from having a coach.

“Coaching is not therapy, it’s a specific set of ACTIONS to break patterns that do not serve you and to build vital behaviors that take you where you want to go,” she said.

Julie offers predominantly two types of coaching: leadership building and individual success coaching.

She serves organizations in developing leadership practices to take them to the next level of life and business. She thrives in speaking to groups of 25-300 people, getting them fired up to tackle change head-on. She teaches all aspects of change, from identifying the compelling need, to their current culture, to their ideal state, and then building the actions to take them from here to there.

The majority of Julie’s clients are small to mid-size businesses that want to up-level and increase the effectiveness of their managers and processes, allowing the executive team to focus on strategy and business development. She also works with family-owned businesses that are looking to pass their legacy off to under-developed heir, or team of managers, as well as those needing to systematize the business for potential sale.

In Julie’s one-on-one success coaching, she works with healthcare executives, stay-at-home moms, university professors and air travel professionals, among others, to prioritize their personal, physical and professional lives.

One of Julie’s clients had this to say: “From the first meeting with Julie, I knew I had found the right person. She ‘got’ me. Through her one-on-one coaching and her workshop, she has helped me adjust my priorities, set goals and take action steps to structure my life around my true passion.”

To contact Julie for more information, you can reach out via email at julie@calltoleadcoaching.com or visit www.calltoleadcoaching.com.

Image showing what Valeo looks like on the inside

Hometown Highlight: Valeo

With all of the fitness options out there, Valeo strives to be just a little different in their approach. Located in downtown Holland, Valeo has a hip, industrial vibe and the space offers every client an awesome environment on their journey to better health and wellness.

What does “Valeo” mean? “Vuh-lay-oh” is Latin for “Have strength, have power, be effective” and that is exactly what they desire for their members.

In 2006, Jessica Luepke took her Exercise Science degree from Hope College and time spent in corporate wellness and established Valeo in her apartment. The business has grown to what it is today with her passion for functional training and her passion for creating a space for people to feel welcomed and proud of themselves.

Along with her husband Mike, who studies Exercise Science at Purdue, Valeo strives to help people look, move and feel awesome!

As part of their mission, they are dedicated to the joy and success of their members. Their goal is to help their members become healthy, active people by providing a welcoming environment and exceptional results-based fitness activities for all ages and abilities.

Word on the street:

“There is a feeling of my ‘fitness family’ when I walk into Valeo. I love the encouragement, the challenges, the laughs and the conversation. It is a welcoming environment. I need you, my body needs you and my well-being needs you.” – Deb

“I can’t enough positive things about my time at Valeo. The atmosphere of encouragement, positivity and community is unique and I find myself leaving each time strong, happy and proud of the achievements they foster in me. I would recommend Valeo without reservation.” – Ryan

Valeo offers personal workout plans, semi-private training, larger group classes and a nutritional lifestyle program that gets at the root of the habit change. There is something for everyone!

Valeo has been honored with the Official People’s Choice Award in both the “Fitness Center/Gym (2016)” and “Personal Training (2016, 2017)” Categories in the Holland’s Best of the Best Awards.

For more information, check out Valeo’s website.

 

A Night of Pearls Event Brochure

Hometown Highlight: TCM Counseling

TCM Counseling is not unlike so many of the amazing non profit organizations that organically came about when a need arose in the Tri Cities area.

For 40 years, TCM Counseling has been providing accessible and affordable professional therapy services along the lakeshore. TCM’s mission: to offer help and healing for all, by providing accessible and affordable professional counseling services.

“Our unique business model enables us to maximize donations and help everyone who calls or walks through our doors. No one is ever turned away,” said Sarah Lewakowski, executive director.

In 2017, TCM provided over one million dollars of mental health services on a budget of $406,000.TCM is able to turn a $1 donation into $3 worth of counseling. The organization depends on every generous dollar received, with the great majority of that money going directly to client care.

With offices in Grand Haven and Holland, TCM helps with issues affecting adults, children, teens, and families, including but not limited to depression, anxiety, stress, trauma, parenting, marriage counseling, addiction, sexual abuse, conflict, coping, communication, ADD/ADHD and more. Partnering with over 50 therapists, all in professional practice, they will find the best counselor for each individual’s needs.

“To me, my counselor has been an angel in disguise. She has faithfully listened and shared her wealth of knowledge with me. Prior to meeting her, I had thoughts of suicide, as it seemed there was no way out due to a very difficult divorce, complications from a car accident and being told that I would never work again as a nurse. She helped me pick up the pieces of my life and put them back together again, all while showing great compassion and understanding,” said one client of her experience with TCM.

On November 8, “A Night of Pearls Down to Earth Fashion Event” fundraiser will offer a magical evening at Porto Bello Restaurants Grand Ballroom to raise funds for needed counseling, and to support awareness of current mental health issues. All proceeds will go to TCM to support their efforts, including the growing School Outreach Program.

For a fun filled evening with upscale fashion show, music, cash bar silent and live auction, as well as a raffle drawing go to tcmcounseling.org for your tickets or to learn more!

Image of a winding staircase

Life Outside of Loans: Baby Steps

I had a salad for dinner last night…and I’ll tell you why that matters in just a bit.

I was recently introduced to the idea of compound effect, and although it’s a simple idea, it really blew my mind. You’ve probably heard of compound interest when it comes to your money — the more money you save, the more interest you earn.

Until recently I had always thought my goals had to be monumentally planned out. I envisioned setting aside 90 days for each goal, spending days planning out each step, laying it out on the calendar, and executing every day for three months. And while that’s a completely valid, brilliant way to see progress in your life, I was getting hung up on how many 90-day goals I had. If I have 10 major areas of my work and life I want to improve on, it’d take me nearly three years to get through it all!

Enter the compound effect. It’s a little like Baby Steps by Dr. Leo Marvin from What About Bob.

The concept of the compound effect is this — that taking even small steps toward a goal adds up to something greater.

A diet, for example. If I’d have chosen to have a couple slices of pizza last night instead of that salad, would it have really mattered? Probably not. One individual meal doesn’t tend to move the scale. How about if I chose pizza again tonight? And tomorrow, and every day for the next six months? Ah, now we’re seeing how the compound effect moves the scale!

On the flip side, if I choose a salad every night for dinner for six months, imagine how much the scale would move in the other direction.

So, while I was getting hung up on spending significant amounts of time to focus on each of my life goals, I started applying the compound effect instead. If I do even five minutes each day on each of my 10 goals, I’ll be taking baby steps toward my goals.

Five minutes a day toward decluttering my home.
Five minutes a day spending more one-on-one time with my kids.
Five minutes a day building my website.

After six months, those little steps will have compounded into something significant and concrete. Much more so than spending my time and mental energy on being overwhelmed or spinning my wheels in planning mode. And I’ll have the changes I’ve made to build momentum to fuel further change.

Use the compound effect to achieve anything in your life or work. Baby steps are better than no steps at all!

On Wednesdays we wear pink!

“On Wednesdays, We Wear Pink”

Every two minutes, a woman in the United States is diagnosed with breast cancer.

To help combat these staggering numbers, every Wednesday during the month of October, North Ottawa Community Hospital (NOCH) will be offering any woman the opportunity to stop by the Breast Evaluation Center to get an annual screening.

Walk-ins are welcome and no appointment or physician referral is needed on Wednesdays from 8 a.m. to noon, making it as easy as possible for women to obtain the screening. All that is required is proof of health insurance.

The American College of Radiology recommends that women receive an annual mammogram starting at age 40 – even if they have no symptoms or family history of breast cancer. Early detection and effective treatment resulted in a 40 percent decline in breast cancer deaths in the U.S. in the last 25 years.

How? Annual mammograms. Mammograms can detect cancer early-when it is most treatable, up to two years before a patient or physician can feel them.

During this effort to expand their services to more women, NOCH employees and volunteers will be wearing pink as a visual reminder for everyone who visits the hospital that mammograms save lives. The Breast Evaluation Center is located on the first floor of NOCH inside the Medical Imaging Department.

The whole program is located at NOCH. All of their experts and technology are in one location.

For more information call 616-847-5430 or visit the NOCH Facebook page.