Saving Cash on your Mortgage

how to lower your mortgage payments

Of course you want to save as much money on your mortgage as you can. The interest rate has a lot to do with how much it will cost you to finance the amount of money you borrow to buy a home. Shop around for interest rates among the various mortgage lenders before you actually submit a loan application. Most lenders have a free mortgage calculator available on their websites so you can experiment with this in entering the amount your wish to borrow and exploring various repayment options to determine your lowest payment and the best repayment terms.

SAVE MONEY ON YOUR MORTGAGE! Start Here By Comparing Your Rates!

When you have an amount of money to place as a large down payment on your mortgage, you will lower the amount of money that you need to borrow.

Having large enough deposit is also one way of ensuring approval for the loan as lenders know you do have a stake in making sure you do meet your monthly obligations. Reducing the amount you borrow will also result in lower interest rates so it won’t cost you as much to have a mortgage. There are lenders who will approve mortgages without a down payment, but they require you to have insurance cover for the amount of the usual down payment. This will increase your monthly payments in the premiums you have to pay for such cover.

Another option for reducing the amount of interest you pay on your mortgage is that of bi-weekly payments. When you make a payment every two weeks rather than once a month, you make two extra payments a year. Each bi-weekly period will result in a lower outstanding balance and thus less financing costs for you. To see how you can save in this way, use a free mortgage calculator on a lending site. You will see how you can shave years off the term of the mortgage and own your home free and clear in less time than you previously thought.

Making repayments in addition to your regular mortgage payment can also help you avoid paying too much for your mortgage. Many lenders allow you to make repayments once or twice a year. This will substantially reduce the balance of the loan, which affects the amount of interest you pay and the term of the mortgage. If you have some money left over each month, you can put it in a savings account and then when the time comes when you can make a repayment you can withdraw the money or transfer it to your loan account. There are also lenders that will allow you to make more than the required monthly payment each month. It is surprising to find what paying an extra few pounds each month will do to cut down on your costs.

The cost of getting a mortgage also includes the arrangement fees, such as the legal fees, city taxes and administration fees. If possible try to pay these fees yourself outside of the loan. Lenders will offer you the option of having them added to your mortgage to save you money, but there is no savings involved if you do so. It not only increases the amount of money you owe, it increases the interest you pay on the mortgage as well.

It pays to be informed when you take out a mortgage so that you don’t pay away money unnecessarily. Search the Internet for valuable information about the many different types of mortgages and the interest rates associated with each one. When you are an informed consumer, you will be able to cut your costs and save money.

Gina Wilson

Another post from Gina Wilson – Credit & Loans Specialist Blogger.

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