Good morning Dinks. If you have a mortgage then you are probably trying to pay it off as quickly as possible in order to save on interest costs. Having a mortgage can be a very expensive asset; therefore Dinks Finance and our friends at Go Banking Rates are here to help you save money on your mortgage. Whether you just purchased your first home or if you having been paying off your mortgage loan for quite some years these tips can help you save money on interest costs and pay off your mortgage quicker.
Use these 5 tips to help save money on your mortgage:
1. Buy your home sooner rather than later. Many people have a personal goal to retire mortgage free and the only way to do this is to purchase your home as soon as possible and focus on paying off your mortgage loan balance as quickly as possible. If you are contemplating the purchase of a home but are nervous about the financial commitment, think of it as an investment. Of course a mortgage loan is a huge debt, but a home is a huge asset. Purchase your home sooner rather than later in order to help pay off your mortgage loan quicker.
2. Double-up your payments. Many banks and finance companies offer the option to double up your mortgage payments. A double-up mortgage payment means that your regular mortgage payment amount will be doubled and the extra money will be applied to your capital mortgage loan. This helps save money on interest costs because it reduces your original mortgage loan amount.
3. Yearly prepayments. Every year your bank may allow you to make a prepayment on your mortgage without paying any prepayment penalties. Usually if you pay off your mortgage before the maturity date you will incur a penalty equal to some or all of the interest costs. However each year home owners may be allowed to prepay a portion of your original mortgage loan amount (usually 10%) without any prepayment penalties. Check your mortgage contract or ask your mortgage representative for details before making any prepayments.
4. Set up biweekly payments. The quicker you pay off your mortgage loan the more interest you will save. Setting up biweekly and accelerated mortgage payments will help you save on interest costs and pay off your mortgage sooner. Biweekly payments are a good idea if your pay frequency is also biweekly because it lowers the amount of each mortgage payment which makes it easier to budget your mortgage into your expenses.
5. Refinance your mortgage. Refinancing your mortgage can help you save thousands of dollars on interest costs because a mortgage refinance lets you negotiate a new mortgage term as well as a new interest rate on the remaining balance of your mortgage loan. Refinancing is not in everyone’s benefit, we suggest that you visit your local bank branch and ask your mortgage representative to run a scenario to see if a mortgage refinance will actually reduce your interest costs and lower your mortgage payments.
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