Let’s face it, mortgage payments can be a real burden. Having to shell out hundreds of dollars every month is not something anyone wants to do. But you can’t have a home without paying your mortgage. Luckily there are some things that you can do to reduce your monthly mortgage payment. You will learn more about them below.
Shop for the Best Rates
Before you get a mortgage, it’s a good idea to shop around for the best rates. This will help you to save on your mortgage from the start! If you have a good credit score, you will have more financial institutions to choose from and some will offer lower interest rates. On the other hand, if you have a bad credit score, you may want to wait until you can bring it up. Bad credit scores can inflate your monthly interest rate, which can be very costly.
Consider Refinancing Your Mortgage
If you already have a mortgage and your interest rate is high compared to the going rate, you could consider refinancing your mortgage. Many financial institutions will be happy to give you a new mortgage at a lower rate, sometimes offering to pay the mortgage cancellation fee from your current institution (if applicable). It’s important to be aware of all the fees involved in remortgaging.
Make A Few Lump-Sum Payments
A great way to save on your mortgage is by making a few lump-sum payments each year. Most banks allow homeowners to put down a certain percentage on their mortgage every year, interest free. Making lump-sum payments on your mortgage will shorten the length of your loan, so will reduce the amount of interest you pay. A great way to fund lump-sum payments is by using your tax refund or yearly job bonus.
Make Bi-Weekly Payments
While lump-sum payments are a great way to help reduce your interest, so are bi-weekly payments. By making bi-weekly payments instead of monthly payments, your home will become yours faster. While not everyone can afford or budget bi-weekly payments, doing so will greatly reduce the overall cost of your home.
Recast Your Mortgage
Another way that you can save money is by recasting your mortgage. When you recast your mortgage you have to make a large lump-sum payment to your mortgage company or bank. In return, the mortgage company will recalculate your principal, which will lower your monthly interest rate.
Avoid Home Equity Loans
When you need some extra cash it can be easy to take out a home equity loan. Having such large amounts of money at your fingertips can easily result in overspending, and increase the length and amount of your mortgage. Instead of cashing in on your equity, consider a small personal loan, only when you truly need it. Reputable companies like 24Cash.ca offer fast, same-day cash that you can pay back within 90 days. This will give you the cash you need while protecting the money you have invested in your home.
In Conclusion
If you want to save money on your mortgage you should follow these helpful tips. Remember that if your credit score has improved over time, you should think about refinancing. Also, avoid taking out a home equity loan that will only put you in debt longer.
