5 Mortgage Saving Tips to Start Using NOW!
More than likely, your home is your biggest monthly expense, more specifically your mortgage loan. While you can't ignore this expense, there are ways you can decrease your monthly payment and pay off your loan faster. The best mortgage company at the Lake of the Ozarks is here to offer you some simple tips for saving money on your mortgage that can help to lower your monthly payments and shorten your loan term. Check it out:
1. Make Additional Payments
Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments which go toward the principal. People pay extra in a few different ways. Paying one additional full payment one time a year may be the easiest to track. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option yields slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
2. Lump Sum Extra Payments
It may not be possible for you to pay extra every month or even every year. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any time. You can benefit from this provision to pay extra on your mortgage principal any time you get some extra money. For example: five years after buying your home, you get a huge tax refund, a large legacy, or a non-taxable cash gift; you could pay a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shorter payback period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge savings over the life of the loan.
3. Cancel Your PMI
While lenders have been legally required to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance goes under 78% of the purchase price, they do not have to take similar action if the loan's equity is over 22%. But you have the right to cancel PMI yourself (for loans made after July 1999) at the point your equity reaches 20 percent, no matter the original price of purchase. Once you think you've reached 20 percent equity, you can begin the process of freeing yourself from PMI payments.
4. Refinance to Reduce Your Monthly Payments
Refinancing can help lower your rate and consequently your mortgage payments. Your best choice for lowering your monthly payments might be refinancing to a low fixed-rate loan. Maybe you now have a higher rate fixed rate mortgage, or perhaps you hold an ARM — adjustable rate mortgage — where the interest rate can vary. Even as interest rates rise, a fixed-rate mortgage must remain at the same, low interest rate, unlike an ARM. If you expect to stay in your home for at least five more years, a loan with a fixed rate may be a particularly good choice for you. But if you do plan to sell your home more quickly, you will need to consider an ARM with a low initial rate in order to achieve lower payments.
5. Put Our 20+ Years of Experience to Work for YOU!
The last tip we will offer is to work with a mortgage professional that has your best interest in mind from the beginning. Our extensive knowledge of the lending industry can be an excellent tool for you when it comes to finding the right terms and conditions to make your loan as affordable as possible. We can help you determine what you can actually afford based on your financial situation, and we can help get you set up for success in getting your mortgage paid off.
By implementing any of these mortgage savings tips, you'll reap the benefits of lowering your overall repayment cost and cut off years from your loan term! For more tips and information on lowering your mortgage payments, contact us to discuss your options. We've got more than 20 years experience in mortgage lending at the Lake of the Ozarks, and can help you make the right choice for your mortgage needs!
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
1. Make Additional Payments
Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments which go toward the principal. People pay extra in a few different ways. Paying one additional full payment one time a year may be the easiest to track. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option yields slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
2. Lump Sum Extra Payments
It may not be possible for you to pay extra every month or even every year. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any time. You can benefit from this provision to pay extra on your mortgage principal any time you get some extra money. For example: five years after buying your home, you get a huge tax refund, a large legacy, or a non-taxable cash gift; you could pay a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shorter payback period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge savings over the life of the loan.
3. Cancel Your PMI
While lenders have been legally required to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance goes under 78% of the purchase price, they do not have to take similar action if the loan's equity is over 22%. But you have the right to cancel PMI yourself (for loans made after July 1999) at the point your equity reaches 20 percent, no matter the original price of purchase. Once you think you've reached 20 percent equity, you can begin the process of freeing yourself from PMI payments.
4. Refinance to Reduce Your Monthly Payments
Refinancing can help lower your rate and consequently your mortgage payments. Your best choice for lowering your monthly payments might be refinancing to a low fixed-rate loan. Maybe you now have a higher rate fixed rate mortgage, or perhaps you hold an ARM — adjustable rate mortgage — where the interest rate can vary. Even as interest rates rise, a fixed-rate mortgage must remain at the same, low interest rate, unlike an ARM. If you expect to stay in your home for at least five more years, a loan with a fixed rate may be a particularly good choice for you. But if you do plan to sell your home more quickly, you will need to consider an ARM with a low initial rate in order to achieve lower payments.
5. Put Our 20+ Years of Experience to Work for YOU!The last tip we will offer is to work with a mortgage professional that has your best interest in mind from the beginning. Our extensive knowledge of the lending industry can be an excellent tool for you when it comes to finding the right terms and conditions to make your loan as affordable as possible. We can help you determine what you can actually afford based on your financial situation, and we can help get you set up for success in getting your mortgage paid off.
By implementing any of these mortgage savings tips, you'll reap the benefits of lowering your overall repayment cost and cut off years from your loan term! For more tips and information on lowering your mortgage payments, contact us to discuss your options. We've got more than 20 years experience in mortgage lending at the Lake of the Ozarks, and can help you make the right choice for your mortgage needs!
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
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