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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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Is Refinancing Going to Help Save on Your Mortgage?

 

Are you bogged down in debt?  Are your monthly home mortgage payments rising each year and getting harder and harder to pay?  If this situation sounds familiar, you may have considered refinancing your mortgage.  But, will it help?

 

When you refinance you’re simply taking out a new loan to pay off the existing one.  It only makes sense to do this if you obtain a lower interest rate enabling you to save money. 

 

Usually, there are two good times to refinance.  If you have an adjustable rate mortgage (ARM) and you’re faced with a continual interest rate rise.  You can refinance to obtain a fixed rate mortgage and avoid the higher payments.

 

Even if you already have a fixed rate mortgage, it might pay you to refinance if you can secure a lower interest rate.  If you’re experiencing a cash flow problem and want to refinance to lower the payments by extending the term of your loan this is not a good reason.  With an extended term you’ll be paying more over the years remaining that you own the home.

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