Getting a mortgage can be a very confusing process. There is a lot of paperwork to sign, documents to read and procedures to be followed. You'd think you were applying to go to Harvard or Yale, except they don't require that much paperwork for you to be admitted! Although getting a mortgage can be a confusing process, there are ... Read more
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A red brick house and a white picket fence - long the American dream of many and in recent years more Americans have been buying their own dream in the form of their own home. Yet, for millions of us we don't have a real good understanding of how our mortgage works completely and as a result don't proactively manage it. There are numerous ways you can cut tens of thousands of your mortgage by taking a few simple steps during the life of your loan.
Have you ever sat down and thought about how much you could save off your mortgage if you paid a little extra every month? It doesn't have to be much, maybe an extra $50 here, or an extra $100 there. In the early years of a mortgage most of your payment is going to pay off the interest on the loan. Every extra dollar you can put towards the principal will have a ripple effect through the entire life of the loan by reducing the total amount of interest you pay. But wait, it gets even better! Suppose you find that you can send in a whole extra payment - you are basically now turning your fixed payment, say $600, into an investment tool. That extra payment is going to go against your loan principle and you are in effect earning whatever interest rate you are paying on your mortgage over the life of the mortgage in reduced interest charges. So if you are paying 6.75% and make an additional $600 payment you are in effect lowering the total amount you will pay on your loan by the compounded amount of that payment. If you have 30 years to go in paying off your mortgage, that extra payment will slash a total of $3,968 off your mortgage! Not a bad investment at all! However, as good as this sounds - beware of one pitfall: pre-payment penalties. Some mortgage companies specifically charge you for paying ahead of time. Why? Because they aren't making as much money off you as they had anticipated. When shopping for a mortgage always make sure that they do not try and penalize you for being a smart consumer and paying your loan off early! Another way to help shave off the amount of interest you pay over time is to consider splitting your monthly mortgage payment up into biweekly payments. This amounts to making an extra payment each year since there are 26 biweekly periods in a year. Again, make sure you won't get penalized for prepaying! Refinancing is another great tool to use during periods where the savings will outweigh the costs associated with it. This is an important point because lower interest rates alone do not always mean you will get a better deal. Many times you have to pay fees and closing costs on the mortgage itself which can quickly eat up any savings you realize with lowering your interest - this is especially true if you have some years under your belt repaying your mortgage already. Do the math before you make the jump to see if it makes financial sense for you to refinance at current rates. It is easy to take a proactive approach in making sure that your mortgage becomes a tool to owning the home of your dreams instead of a burden. Making a few smart financial choices can go a long way to helping you pay your mortgage down quicker than you ever imagined.
It's no secret that the U.S. housing marketing is having one of its largest slumps since the early 1980s. Pick up a newspaper or turn on the news and you are inundated with a daily report of more foreclosures, people falling fu... Mortgaging your house is a big project. It might as well be one of the biggest investments that you are supposed to make. If you are in California and you want to invest in real estate you should spare some time for a California... Typically home refinancing is done when you have a mortgage on your home and apply for a second loan to pay off the first one. While taking the decision to go for the home refinancing option, it is important to first determine w... If you have poor credit, you might feel the journey is impossible. It is possible to get a credit card if you have poor credit, but it may come at a costly fee. In most cases, people with poor credit or current debt problems oft... I remember getting my first credit card back in 1982-ish. I started a new job and was anxious to get my credit started. I wanted the feeling of having a piece of credit with the banks. I knew that if a bank gave me credit, tha... Home Mortgage Refinance is taken up on the same property on which the first loan was taken. Home Mortgage Refinance is a very effective way to debt related problems.
Borrowers take refinance for different purpose. Some borro...
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