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How Paying More on Your Mortgage Can Save You Money

It’s the American dream to own your own home and dreamers will go to any lengths to accomplish this even if it means borrowing thousands of dollars to be paid back over a 30 year period. It’s quite an obligation to make 360 payments month after month with the bulk of the money going toward interest, at least in the beginning.

 

The interest on an average home over a 30 year period can account for twice the cost of the home.  Interest is working against you 24/7/365.  Wouldn’t it be wonderful if you could pay off your debt years sooner and save thousands of dollars? 

 

You can.  It just takes discipline and perhaps a little budget adjusting. It’s no secret that paying the mortgage twice a month, instead of only once will save you thousands and pay off your debt years sooner.  Some call it the bi-weekly mortgage plan.

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Make Mortgage Lenders Compete For Your Money

Selecting a mortgage for your home could be the most important financial decision you will make.  It’s an obligation you assume for many years and a small difference in any part of the negotiations can make a big difference in your monthly payments.

 

Mortgage lenders want your business so don’t be afraid to negotiate.  Do your homework and let them know you’re shopping around for the best deal.  The more you know, the better position you’re in to bargain.

 

It’s your money and worth the effort.  Rarely are rates and terms engraved in stone in the negotiating stage.  Even a quarter point better interest rate obtained can save you hundreds or even thousands of dollars in the long term.

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Two Ways to Save When You Buy a Home

 

Buying a home is probably the largest investment you and your family will ever make.

Unless you’re wealthy, few people buy homes and pay cash.  Rather, they make a small down payment and obligate themselves to a financial lender for a term of usually 30 years.  In this case, the lender determines the interest rate and gives you a thorough financial background check.

 

There are at least two other ways to buy the home of your dreams and probably save money:  assuming the existing mortgage or owner financing.  Either method usually saves you time, trouble and money. 

 

If you’re trying to assume a mortgage first make sure it’s assumable and transferable.  Many mortgages have a due on sale clause that states if the owner sells all or part of a house the entire balance becomes due and payable on demand.  A lender may be willing to overlook a non assumable mortgage is you’re able to make good any overdue payments and agree to do further business with the existing lender.

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