Simple Tips to Get the Most Out of Your Mortgage

Owning a home is most certainly an incredible thing.  However, the fact remains that if you don’t work your mortgage correctly, it can haunt you for a very long time.  How do you ensure that you get the most out of your mortgage, rather than it getting the most out of you?  Here, you’ll find a few helpful tips to keep your bank account in the black and your homeownership as a blessing.

Consider a Different Payment Schedule

Most homeowners choose to make a monthly house payment.  This is the defacto norm for 99% of homeowners in the world.  However, did you know that you can choose to have a different payment schedule?  Many lenders will allow you to make weekly or biweekly payments, rather than coughing up that huge chunk of change once per month.  Why would you do that, though?

If you choose to pay on a weekly or biweekly basis, you’ll actually save money on interest over the life of the loan and will actually pay your loan off years ahead of time.  You will also be able to enjoy a simplified budget.  Most people are paid by their employer every week, or every two weeks – paying your house payment when you get your paycheck is simpler than trying to save up for a larger payment on a monthly basis.

Pay More, Sooner

Now those words don’t exactly lend themselves to a picture of better financial health, but it remains true, nonetheless.  One of the best ways to save a dramatic chunk of capital over the life of your home loan is to make extra payments.  Not only will this reduce the amount of interest you owe, but also it will help you pay off the loan principle in a shorter period of time.  These are called “privilege payments” and can be the means by which you get rid of that home loan faster.

Make a Larger Down Payment

While this won’t help existing homeowners, those about to purchase a home can certainly benefit from this tip.  The larger the amount you put down on that new home, the lower the amount will be that you have to finance.  Consider putting down as much as possible, in order to reduce your loan principle.  This will also reduce the amount you will owe in interest fees and result in a better financial picture during your ownership.

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