Written by Charlotte Wood (last updated February 21, 2009)
You will likely be making some kind of mortgage payment for most of your working life and maybe even beyond. Because this is the case (unfortunate though it may be) you want to always look for ways that you can reduce your mortgage payment and/or how long you actually will be making payments. There are ways to do both and if you know just a few tips you'll be able to make a difference in your monthly and lifelong finances.
Your mortgage bill is likely your most, or one of you most expensive bills you pay each month and we all know that sometimes that monthly payment is hard to come by. Sometimes just all the money isn't there. Fortunately there are ways to reduce the amount you pay each month without resorting to late or partial payments; you can still keep up on your mortgage—you just need to know how to do it. Refinancing is always an option. If you can refinance your house at a lower rate then you can save thousands of dollars just in interest. To do this however, you do need to make sure your credit score is up to par and that you actually will qualify for a lower rate and not a higher one as that would completely defeat the purpose.
If you're just buying a home, look ahead and plan for those months when money is tighter. If at all possible, make at least a twenty percent down payment and that will do a lot to reduce the amount of your monthly payment and the amount of interest you'll have to pay. Also if you can set up a bimonthly payment plan where you pay half at one time in the month and half the other, you can spread out your money more and it can actually speed up your loan.
To reduce the term of the loan (thus reducing the interest you pay overall, again saving you money), make additional principal payments when possible to reduce the balance and interest charged as much as possible. If you can do that then you can shave off years and interest on your loan. Reducing your mortgage isn't necessarily difficult, it just takes planning and a thoughtful application of money. If you can apply these simple tips to reduce your monthly payments or your term or both, then you can save money and make a few more years of financial security possible.
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