Today is

 

Tuscarawas MHA Resources:

Tuscarawas MHA Home

Who We Are
Fair Housing
Contact Us
Useful Links

Rental Assistance for Tenants
Section 8 Housing
Tenant Forms
Information Policy
Portability
Renting to Relatives
Waiting List
Section 8 Partnership
Resident Advisory Board

Rental Assistance for Owners
Section 8 Program Overview
Assistance Calculation
Renting to Relatives
Evictions
Housing Quality Standards
Lead Based Paint
FAQ's
Owners Update Newsletter
Section 8 Partnership


Family Self-Sufficiency
FSS Program
FSS Newsletters

Find the Weather for any City, State, Zip Code or Country

April 2002 Owners Update

Taking a Look At Paying Down Your Debt

If you are in the enviable position of having excess money coming in, you may be tempted to pay off debt. Most people want to reduce their debt as much as they can and that may include their mortgages. While debt reduction is almost always a good thing, it is important to give careful thought to which debt to pay down first, and even whether to pay the debt down at all. That's right, sometimes it just does not make any sense to pay down a debt before its due date. Debt can be profitable, and should be used as an investment would be used.

The most important things you need to know are the amount of the effective interest rate and the amount of the prepayment penalties. The effective interest rate is what you would actually pay in interest from the day you propose to pay the loan off through the last payment, if you allowed the loan to be fully amortized. This issue does not arise with interest only loans. Note that your payoff on a fully amortized loan will be the amount of principal you still owe plus the prepayment penalty. The amount you owe will be calculated by taking all the payments you owe to date, less the amount of the interest that has accrued under the note, subtracted from the principal amount. Looked at another way, it is a rebate of the interest unpaid to the date of prepayment.

Note well that this interest rebate is only very rarely calculated on a straight line basis. In most cases the interest would be rebated as calculated under what is called the Rule of 78, or Sum of the Year's Digits. The effect of the rule is to front load interest payments. If you are, say, 2/3 of the way through a fully amortized mortgage, you will have already prepaid most of the interest that would accrue during the total life of the loan. This means that, for example, the effective interest rate you are paying on your loan for the final 1/3 of its existence may only be 3%, even though the rate on the face of the note is 8%. The reason this is important is that the criterion for paying off any debt is whether you will end up with more money in your pocket by paying off the loan, or by using the money to create more income generating machinery. This is the principal of leverage.

If you believe that at the end of the day you will have more money in your pocket by paying a debt, then, by all means, do it. This is almost always the case with credit card debt, consumer debt, and unsecured business debt. It is not always the case with debt secured by real estate, or even personal property, such as automobiles. So do the math and remember that managing your debt wisely is not always the same as paying it off. Source: www.landlord.com

TMHA To Launch Internet Site In April

Effective in April 2002, (no exact date in April has been determined at this point) Tuscarawas MHA will launch a site on the World Wide Web (Internet). This TMHA project has been in the works for some time and we are happy to see it come to fruition. The web site will be loaded with information regarding TMHA programs and services. There will be special sections for both tenant and landlord information.

Additionally, the TMHA Owner Update (landlord newsletter) and the FSS Program Newsletter will be posted on the web site. The site will also contain downloadable tenant forms. TMHA tenants with internet access will be able to go to our site and download work verification forms, child support verification forms, bank forms, and child care forms. The initial application to sign up for rental assistance will also be available for print out.

TMHA staff have put together a great deal of useful information regarding the Section 8 program for landlords. Prospective landlords can now find out all about how the program works without ever having to contact the office. The web site will also contain many useful links for both tenants and landlords. When the web site launches in April our address will be:

http://www.tuscarawasmha.org

Additionally, the TMHA site will contain plenty of information regarding fair housing issues and will contain a section on the home page regarding housing industry news which changes daily. We encourage those landlords with internet access to give it a look.

Page Two