Secrets To Saving On A Mortgage
1. Compare Bi-Weekly vs. Monthly Mortgage Payments.
You will be pleasantly suprised to see just how much you will save by choosing the bi-weekly mortgage payment option. For more information on a bi-weekly option click here. The biweekly mortgage payment, which is an optional payment option that you usually have to request, would require you to make (1) half payment every (2) weeks for a total of 26 payments a year. This equals out to an extra payment being made each year which usually goes directly to the principal and can cut a 30 year loan down to a little over 23 years and save thousands of dollars over the life of the loan.
2. Let Banks Compete For Your Business.
When banks compete against each other YOU WIN. Mortgage brokers are very helpful and usually can get you the lowest interest rate, but most generally the banks that the mortgage brokers use are online and take applications online. Mortgage brokers are just really the middle man and can charge fees for there services. So make sure to shop around to find the lowest possible rate so yoou can save thousands of dollars of interest over the life of the loan.
3. Find The Shortest Term Mortgage You Can Afford.
Making sure that you are getting the right type of mortgage loan is very important. Although your payment will be a little higher the 15 year fixed rate mortgage is the best option. You will save thousands of dollars in interest over the life of the loan.
4. Negotiate Closing Costs With The Seller.
Closing costs are like cars, they can usually be negotiated. Sometimes the seller of the home will offer to share some of the closing costs fees to make there home more appealing to would be buyers. It never hurts to ask and if they agree and will pay for some of these fees make sure you put it in your contract. This can save you a lot of money. Most generally these fees can be as high as 7 percent.
5. Refinance Your Mortgage Rate.
You should always consider refinancing your mortgage if you can get a rate that is at least one or two percentage points lower than your current mortgage rate. Be sure to use our mortgage refinancing calculator to see if you would benefit by refinancing your mortgage with a lower interest rate. Also ask your accountant to calculate how much your new mortgage (including points, fees and closing costs) will cost and whether, in the long run, it will cost less than your current mortgage.
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