|
Tips On Streamlining Your Mortgage Payments
Author David Schneider | May 23,2007
|
Applying for a mortgage, qualifying, and moving into the house of your dreams is both exhilarating and terrifying. Getting a mortgage, however, is typically very expensive and can cost much more than the actual house is worth. While this is unavoidable for most, there still are many ways to reduce the overall amount that you actually pay. Here are some tips about how to save tens of thousands of dollars on your mortgage payments.
Look At Credit Report For Errors
If you are now looking to get a mortgage, then there are a couple of things you should do before you apply for it. The first thing is to look over your credit report and make sure there are no errors. Sometimes things may be corrected with a creditor but not corrected on the credit report. Be sure that you take the time to fix it before you make your mortgage application. A low credit score can raise your interest rates quite a bit or you could even be rejected for you loan.
Apply When Rates Are Low
You can also wait until the mortgage rates are low before you apply. By watching the current rates, you will know when they start getting lower and that would be good opportunity to get a better rate and a better deal.
Avoid Private Mortgage Insurance
When you go to buy a house, it is best if you put down at least 20 percent of the value of the house. Doing this will enable you to not have to get Private Mortgage Insurance (PMI), and it can save you a thousand dollars or more each year. If you already have a house, and are paying for PMI, you may want to consider refinancing and getting a first and a second mortgage. The first mortgage will need to be for about 75 percent and the second one for the balance, plus any cash that you may want to add. Lenders are often doing this so that you can avoid paying PMI.
Refinance For A Shorter Term
Another option is to refinance for a shorter term. If you currently have a 30-year mortgage, and are going to live in your house for at least another seven years or so, then you could save a lot of money by getting a re-mortgage with a 15-year term. The greatest value comes if it is at least 5 years shorter than what you have now in the way of time left. While it may slightly increase your monthly payment, it will reduce your overall expenses by many tens of thousands of dollars. You may also be able to get similar results if you simply add one full month's payment each year. Make sure, however, there is not any penalty for paying your mortgage off early.
Refinancing for a lower interest rate alone is another good reason, even if you do not reduce the term length. Another good reason is if you have an adjustable rate mortgage and you see that the interest rates are headed upward. Ideally, you may want to try and wait until the interest rates are at least one percent lower than what you currently have. More would actually be better, but one percent will give you a considerable reduction in monthly payments.
Compare Quotes Carefully
When you go to look for any of these options, you want to get several quotes for mortgages. Then look them over and find out which one is the deal for you. There can be a significant difference in interest rates and fees in the different lenders or mortgage products. Be careful to not overextend your finances and try to get too big of a house in relation to your income.
A good place to start getting some mortgage quotes is QuoteMatch.com. You can quickly receive several excellent quotes from qualified lenders who want to extend the credit you need to you. Each one of them will provide you with their best offer - and let you choose which one you want. Just simply fill in the application and the quotes will soon be on their way. |
|
|
Print
E-mail
Del.icio.us
Digg
