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How to Pick the Best Amortization Period for Your Mortgage

How to Pick the Best Amortization Period for Your Mortgage

Are you researching the perfect home for your family? Maybe you’ve already looked at dozens of homes for sale online and have a good understanding of what type of properties interest you. Good! Now it’s time to think about how to finance it!

Smart first time home buyers (and second-time buyers for that matter) can get started with a mortgage pre-approval. Pre-approvals are important for several reasons:

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  • You’ll save time by visiting/viewing homes that you can afford.
  • Real estate agents and sellers typically only want to work with pre-approved buyers.
  • Sellers will take your offer more seriously – any offer coming from you is viewed as legitimate.

One of the key questions that you will need to answer is: How long do you want to take to pay back the home loan? Do you want to pay if off fast and live debt-free or spread payments out? It all comes down to the amortization period.

The amortization period is simply the amount of time that it takes to pay off a mortgage. Currently, in the United States, the maximum amortization period that banks offer is 40 years (for government-backed mortgages like FHA loans and VA loans).

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How does my mortgage term affect my monthly payments?

Lenders offer more than one option. You have a wide array of choices. In fact, mortgage terms can be set as 5, 10, 15, 20, 30 all the way up to 40 years.

  • Longer amortization periods decrease the amount you’ll need to pay each month. That’s the good news. The bad news is that a longer loan amortization periods increase how much you’ll pay the bank in mortgage interest.
  • Shorter amortization periods cost the homeowners less. For two reasons. First, Banks offer lower interest rates for mortgages with shorter terms because the money they lend to you is tied up for a shorter period of time. Compressing a mortgage term into a shorter duration also means you’ll pay less interest.

What amortization period should I use?

Glad you asked. There are two ways to evaluate this decision.

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First, as mentioned above, longer terms mean you’ll have a lower mortgage payment. As payments are spread out, less is needed each month to meet your monthly mortgage obligation. And home affordability is based, in part, upon your monthly income (lenders make a calculation called a debt-to-income ratio) compared to your expected mortgage payment. Therefore, lower payments translate into a bigger home. That’s a very appealing option for young families.

Shorter amortization periods decrease how much you’ll pay in interest. You’ll pay off the home faster and save money (less interest). While a buyer would qualify for a smaller home should he or she chose a shorter term, saving money can be quite appealing. You’ll certainly have more cash to diversify and invest elsewhere.

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Make a decision based on your personal financial plan.

30-year mortgage terms are the most popular option. That’s because people love bigger homes; folks tend to choose more square footage above all else. Longer terms tend to be more forgiving for first-time homebuyers who want a bigger home to “grow into” with their family.

Conversely, people obsessed with saving money tend to choose shorter terms and smaller homes. Here’s another reason to choose a shorter term: if you are over 40 years old and want to retire debt-free, carrying a mortgage for 30 years will not make that possible. Older homebuyers may want to plan ahead and choose a 15-year or 20-year term.

Clearly, you should choose a mortgage term based on your preferences. It’s important to know the difference between a longer and shorter amortization period. Armed with an understanding of the tradeoffs, you’re in a better position to make a choice that matches your style; carefully draft your future goals to make the best selection based on the kind of financial future you envision.

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Last Updated on February 11, 2021

Want to Get Free Product Samples Like Bloggers and Beauty Gurus Do? Read This.

Want to Get Free Product Samples Like Bloggers and Beauty Gurus Do? Read This.

Imagine receiving a regular supply of free samples through your letterbox?

These free samples by mail could include things such as cleaning products, cosmetics and packaged food.

Free samples are a great way to try out some of the latest products. One week you may have a new toothpaste to try – the next week you may be snacking on a delicious chocolate cookie sample.

As the saying goes, variety is the spice of life. And by requesting free samples by mail (I’ll show you how shortly), you’ll have not just variety – but fun too!

Tell Me More About Getting Free Samples Sent to My Door!

So, it looks like I’ve caught your interest. That’s great news!

Just before I introduce you to 10 places where you can get free samples by mail, let me clarify a couple of things.

Firstly, all the places I’ll talk about are currently active in sending out free samples to consumers. (In other words, no links to out-of-date or dead pages!)

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Secondly, location is key. If you live in North America, then you’ll have a wide selection of places to sign up to. In other locations (for example, Africa, Asia and Europe), you’ll have fewer choices – but free samples by mail are still a possibility.

Lastly, to whet your appetite for the freebies, here’s a short list of product examples:

  • Pet food.
  • Beauty products.
  • T-shirts.
  • Greeting cards.
  • Wallets.
  • Snack bars.
  • Vitamins.

Free Samples by Mail… Tell Me Where to Get Them!

It’s now time to share my recommendations for the best sites to claim free samples from.

Let’s start with…

#1 SampleSource

    This company sends out boxes of 6-12 free samples about four times a year. Products include baby wipes, cereals and tissues. Register with SampleSource to be notified of the availability of their free samples. (Canada and U.S. only.)

    #2 Influenster

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      As their name suggests, Influenster wants to send free samples to you in exchange for you sharing about the products on your social media accounts. Once you’ve become a member (join for free!), they’ll send you a box of free goodies every few months. The more you share pictures and reviews of the products – the more free samples they’ll send you! (All major territories.)

      #3 PINCHme

        This organization will send you free samples in the hope that you’ll then go out and buy the equivalent full-size products. To receive regular boxes of free food, drink and cosmetic samples (and sometimes coupons), then sign up and create your profile. (U.S. only.)

        #4 House Party

          Thinking of throwing a house party? If yes, then be sure to sign up with this company. They’ll send you a box of ‘themed’ products and services that you can hand out at your party. Register with House Party. Wait for the fun freebies to be mailed to you. And then start sending out your party invites! (Worldwide.)

          #5 YoFreeSamples

            This site is a great resource for a whole host of free samples that can be mailed directly to your door (with no survey requirements!). You’ll find anything from books to perfume, with new offers listed daily. Head over to their site to see what’s currently available. (Mostly U.S., with occasional offers for other countries.)

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            #6 Magic Freebies

              The U.K.’s most popular freebie site. Register for their email newsletter, and they’ll send you a daily email with eight free sample offers. These include products such as disposable razors, dog bowls, and even fake tan! So, what are you waiting for? (U.K. only.)

              #7 SweetFreeStuff

                Since 2002, this simple site has been linking to the best free sample offers currently available. To get started, sign up to their daily email newsletter, which contains links to the latest offers. As well as free samples, SweetFreeStuff also gives information on coupons and deals. (Worldwide.)

                #8 Sample A Day

                  Would you like to receive a notification of a new free sample every day? Well, that’s the promise from this site. They claim to thoroughly research all offers, ensuring there are no catches or hidden surveys! From baby products to socks, this site is sure to have something for you. Registration is super-easy. Simply enter your email address. (Australia, Canada, U.K. and U.S. only.)

                  #9 Pretty Thrifty

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                    This site specializes in free beauty products, but also lets you claim free samples such as energy drinks, snack bars, and even magazine subscriptions. Pretty Thrifty has more than 85,000 followers on social media, so clearly knows how to attract free sample hunters. One thing that makes Pretty Thrifty stand out from most of their competitors, is that their email newsletter is available in daily, weekly and monthly formats. (Mostly U.S., with occasional offers for other countries.)

                    #10 CrazyFree

                      My final tip for getting the best free samples by mail, is Australian company CrazyFree. Their funky website offers big brand free sample offers, which currently include items such as Dolce & Gabbana perfume, Coke Zero, and Happy Dog pet food. To claim the offers, select the free samples you would like, and then complete their registration form. (Australia, U.K. and U.S. only.)

                      Receiving regular free samples by mail is a fabulous way of testing out the latest products on the market (and some that aren’t even on the market yet!)

                      You’ll impress your friends and family with all the free stuff you’ll be receiving. And take it from me… it’s a fun, free and rewarding hobby.

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