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| Mortgage Tips |
Mortgage Tips:
Tips to lower your monthly payment
Tip 1:Get rid of your PMI
Tip 2:Get a Low interest rate
Tip 3:Pay for Points
Tip 4:Lower your total Amount (closing cost, etc.)
Tip 5:Get the right mortgage plan
Tips to pay your mortgage off sooner
Tip 6:Mortgage Accelerator
Tip 7:Pay Extra
Tip 8:Change your Plan
More Tips:
Tip 9:Pay extra sooner than later
Tip 10:Refinance if rate is lower
Tip 11:Budget your finances (to pay more sooner)
Tip 12:Budget your finances (to have more money)
Tip 13:Pay off the higher rate 1st
Tip 14:Watch your ARM's
Tip 15:When ARMS are favorable
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Tip 9: Pay extra sooner than later - The sooner you place money into your mortgage, the less interest you will have to pay in the future.
When you make a mortgage payment, part of your payment is interest and the other part is principal (unless you have an interest only loan). The interest part goes into the pockets of your lender, while the principal portion is placed into your home and it yours (in the form of equity).
The "Interest Portion" decreases slightly on each of your montly mortgage payments. Each time you pay extra on your payment (which is considered extra principal), the more your interest portion of your payment decreases even more on your next payment. The trickles down to each future payment that you make and you can take off months if NOT years off your mortgage.
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Tip 10: Refinance if rate is lower - Always consider refinancing your loan if the rates are lower. I've been told to look to see if the rates are .5% lower than your own, but there are a lot more key factors that come into play (how long you are keeping your loan?, do you plan to buy another home soon?, how much is your loan worth?).
By refinancing you can save hundreds monthly on your mortgage payment.
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Tip 11: Budget your finances (to pay more sooner) - Try to document (my favorite is Excel spreadsheet) all of your finances to help you figure how much money you put down as an extra payment.
Many people hold on to too much money in their savings because they don't know when their bills are due so they hold back on making more on their payment. Remember Tip 9. By budgeting you can see that you can put down $500 this month instead of only $200. By paying this amount early you can save yourself hundreds in interest payments that would have accumulated during the lifetime of your loan.
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Tip 12: Budget your finances (to have more money) - Figure out how you are spending your money with budgeting. How many times do you go out to eat? Can you reduce that? What do you buy at the store? Can you reduce this as well?
By finding ways to save money monthly, you can put that money back into your mortgage to help you pay it off sooner.
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Tip 13: Pay off the higher rate 1st - If you have extra credit card bills, car payments, etc. then always pay off the loans that have the higher interest rate first. You can actually combine credit cards bills onto an Home Equity line of Credit account and get 1 lower interest rate on all of them.
The key is to pay less in interest a month. By eliminating you higher interest loans then you will be lowering what you pay in interest monthly and putting more into your principal.
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Tip 14: Watch your ARM's - If you have an ARM (adjustable rate mortgage) make sure you know when your fixed rate payments have stopped and your new adjustable rates begin. It might be in your favor to refinance and get another ARM Or a fixed rate depending on your mortgage goals.
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Tip 15: When ARMS are favorable - ARMs are favorable when you are going to pay your mortgage off soon, OR you are going to be buying another home soon. ARMs give you a lower interest rate upfront, which make them favorable for short term mortgage goals.
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