If you are like most families out there, your mortgage is probably one of the heaviest bills you have to pay each month. Good news is that you can save quite a lot of money on your mortgage too. All you need is some know-how, some determination and some attention to detail. Here are some very useful tips on how to save more money on your mortgage so that you can enjoy a more stress-free, happier life:
Very often, banks will create an offset savings account for those who take a mortgage from them. A lot of people don’t actually get to use these savings accounts, but the truth is that they can really save you a lot of money on the long run. By simply using the savings account and transferring some money there every month, you can save yourself months and even years off your mortgage. Even if you add only $50 as an extra every month, you will still be able to take a few months off your mortgage repayment period. Plus, you will have instant access to your savings account whenever you need them, so you will not have to call for desperate measures if, for example, you have to pay for an unexpected, emergency bill.
Call Your Lender
Sometimes, saving money on your mortgage can be as simple as calling your lenders. If you have seen another offer somewhere else and if it’s better than your current mortgage, calling your lender is a very smart choice. Banks and mortgage companies will go to pretty large extents to make sure they keep their clients, so simply calling your bank may get you a better deal on the spot. It may not feel like a lot, but when you calculate the savings over a long period of time (e.g. 30 years), you will see the difference for sure.
Pay Lump Sums Whenever You Get the Chance
Paying a lump sum to your mortgage every once in a while can go a very long way when it comes to shortening your mortgage repayment period. Bonuses, gifts and extra-income can be added to your mortgage as lump sums, which will automatically lower how much you have to pay every month. If you do this as often as possible, you have real chances of lowering your mortgage in a considerable way.
Analyse Your Mortgage Options from the Very Beginning
If you haven’t taken your mortgage just yet (or if you plan in selling your current home and taking a new mortgage for a more affordable one), you should pay a lot of attention to how you choose your mortgage. Analyse all the options out there, the interest rates and all the additional fees too. Furthermore, do take into consideration less conventional ways of getting a mortgage too. For instance, a house seller’s loan will be paid directly to the seller and you have a much better chance of dodging a series of fees and of getting a better interest rate too.
The question “How does a reverse mortgage work?” can best be answered by looking at it as a financial booster for retirement income. If you are like most retirees then you have a very limited income, which can make paying medical costs and other bills difficult. If you were to take out a standard loan then you would have an additional monthly loan bill to repay, but a reverse mortgage doesn’t work that way. You can pay whatever amount back towards the loan balance that you want at any time, but you will never receive a bill unless you no longer live there. As soon as you move out or die the loan will be due for repayment.