Saving money and paying off loans on your mortgage may not be a usual pairing, but it can be done. This usually entails a bit of deliberation on your future mortgage payment. You have to look at the general picture instead of what you can have at the moment. Here are a couple of tips on how to save a lot of money while paying off your loan.
As much as possible, you have to scout around and avail of loans via a prime lender. A prime lending company can offer you the best mortgage rate. This means that you have fewer payments due and more benefits to gain as opposed to loans from sub-prime lenders. As you know, sub-prime lending companies (for bad credit and such) tend to charge exorbitant fees for their loans, as a guarantee against possible non-completion of payment.
Scouting around and availing loans from prime lenders may sound easy enough to do. However, according to recent market studies, a number of people are actually making a beeline to the sub-prime lenders instead. Why? People simply assume that sub-prime loans are all they can handle. These are the people who: at one point or the other declared bankruptcy; missed multiple payments on other credit companies; are paying off a number of other loans; etc.
Low credit score is not synonymous with bad credit. There are also some people who do have (or have had) bad credit rating, but with a credit score that is on an acceptable plateau. In which case, there will always be one or more prime lending company that will accept their business.
If you are indeed looking at sub-prime loans, it would be best to check your credit score first. You might be pleasantly surprised to find that some prime lenders will accept loan applications from you despite your low rating. On the other hand, if your credit score does not qualify for prime loans, you have to at least make sure that you are choosing loans from sub-prime lending company with the largest possible down imbursement.
Calculate your risks beforehand. Who among us have never been enticed with such engaging promises of great pay-outs for the mortgage we have now? Unfortunately for most of us, we learn the pitfalls and drawbacks of our current loans a bit too late.
The rule of thumb here is: never fall for the first loan that comes your way. There will always be a better deal somewhere. If you are not at all familiar with the ins-and-outs of mortgage, mortgage rate, and mortgage payment, you may want to hire the services of a lending officer or financial adviser. These pros can lead you to the best deals in the market.
However, if you would rather do this on your own, then you should really take your time analyzing all aspects of the loan: from the loaning company, right down to the last payment you have to give. These days, it is easy enough to figure out just how much money you are to gain in a loan and eventually shell out for its payment. A mortgage calculator is an invaluable tool indeed, and a great number of these are free to download from the web and use at your convenience. More specialized tools like the mortgage rate calculator and the mortgage payment calculator are also downloadable free of charge. (
Apostol Lucian)
Wednesday, July 22, 2009 at 7:06 AM Posted by Admin Wouldn't it be great to be debt-free? The American dream of homeownership has traditionally come with a 30-year mortgage. Add to that credit cards, car loans, college tuition, and the average consumer is drowning in debt. Over the last few decades this has become our way of life, buy now, pay later.
But with the dramatic meltdown of our financial industries over the last few years, people have begun to make a paradigm shift toward reducing debt rather than getting in deeper. Since the mortgage is typically the largest and longest-term debt people have, it is an appealing target to eliminate. The big question is, what is the best way to do that?
Logic will dictate that in order to pay off a loan faster, you either have to make additional payments, or pay more than required for each payment. So in order to make this work you have to have some discretionary income. We need to start realizing that if we pay off our debts faster, we not only save a lot of money in interest; we save more money than we pay in.
For example, if I send in an additional $5000 with my first payment on my 6% $200,000 30-year mortgage, that will save me $28,304 in interest. When I take out my $5000 payment, my net savings will be $23,304. It also shortens my 30-year mortgage by 22 months. I can continue doing this over and over, as I do the time and money savings compound.
But will I have the discipline to do that when the great deal on a new 60" HDTV comes along? And does it make sense to put all my discretionary income toward my debt, even if I have the self-control?
This is where a good mortgage acceleration program comes in. By utilizing financial concepts that have been used by Fortune 500 companies, you can dramatically reduce the amount of interest you pay, as well as the time needed to pay off your debts. With this strategy you don't have to make large changes to your spending habits; you merely change the way you do your banking. Homeowners can pay off their mortgage in only 6-15 years, and save tens of thousands of dollars in interest. And you don't have to stop there; you can include any other debts you have in the program.
You can factor in building up an emergency cash fund of three to six months income -- something that financial planners universally suggest. And yes, if you just have to have that 60" HDTV you can even include that in the program! Yet doing so will show you the ramifications of that choice in terms of how much longer it will take you to get out of debt. And possibly when you see the difference, you may decide that your old 42" is perfectly fine.
Obviously the more things you want to do, the more discretionary income you will need or the longer it will take. But using this program allows you to test different scenarios and see the results for yourself! The program contains an algorithm that systematically creates the highest interest savings possible in the least amount of time. Each individual, due to the uniqueness of their situation, requires a custom plan to achieve optimal results. Plus, if you make additional payments on a conventional 30-year fixed-rate loan, you can't borrow that money without taking out a home-equity line of credit or a home-equity loan. With the mortgage accelerator program, you already have the line of credit in place. That gives homeowners confidence that they can be aggressive in paying their mortgages and still have money readily available if a financial emergency comes up.
Using the example of the 6%, $200,000 30-year mortgage, you could save over $160,000 in interest charges by using a mortgage acceleration program. This is what I call preventing an unintentional wealth transfer, where you transfer your wealth to the bank. Imagine what a difference you could make by investing that $160,000 into to your retirement plan rather than giving it to the bank! (
Garry Richardson)
Saturday, July 11, 2009 at 11:29 PM Posted by Admin With unemployment approaching 10%, there are an increasing number of foreclosures happening because of loss of income. When someone loses their job, statistically they are dramatically more likely to miss payments on their mortgages and fall into foreclosure. It’s estimated that there may be between 2 and 3 million foreclosures in the US in 2009. To help guard against losing their homes, many Americans are buying mortgage insurance policies to protect themselves in the event of a job loss, injury, or either financial setback.
A homeowners insurance policy protects the homeowner from having to pay damages due to an accident, theft, or act of nature. A mortgage insurance policy protects the lender from loss and protects the policy holder from losing their home. If you lose your job or fail to make your mortgage payments for any reason, you mortgage insurance policy will kick in and start covering the payments to your lender.
Mortgage Insurance: The Benefits
Mortgage insurance offers several benefits such as: prevents the homeowner from losing their home, protects the lender from lost payments, allows buyers to buy a home with less than 10% down, and allows home buyers to buy a property sooner since there is no need to wait for a full 10% down payment. So not only doesn’t it provide the security of knowing that you will always retain your home but it can allow you to purchase a home sooner with a smaller down payment.
It’s Important to Act Ahead
It may be a very unpleasant thought to think about, but you should always be prepared in the event you or a loved one loses their income and it puts your financial security in jeopardy. Investing in a solid mortgage insurance policy can provide the peace of mind and the safety net you need in these tough economic times.
It’s always recommended to compare quotes from multiple different companies to find the best rate. Using a service like InsuranceAgents.com you can compare up to five mortgage insurance quotes and compare them to see who has the best offer. (Tom Lustina)
