Whether you are a first time home buyer or renewing your current mortgage, it is important to learn the best ways to save on mortgage costs. With the right planning and effort, you can save money, making a lower monthly payment and paying your home off at a faster pace. Check out the tips below to see how you can save.
First time home buyers as well as those renewing a mortgage can benefit from shopping around. There are financial institutions as well as private lenders that offer mortgage loans, which means there is potential to save. Look for the best interest rates as well as loan terms to see how you can save. Also, consider what is important to you. Are you buying a forever home? If so, you may benefit from a longer term as your monthly payment will be lower. Do you wish to pay off your home faster? In that case, you would benefit more from a lower interest rate at a shorter loan term. Consider your end goal and find a mortgage plan that suits your needs. When you compare mortgage rates, you get a better sense of how you can lower your monthly payment or pay your loan off quicker.
When considering a new mortgage, it is important to think about prepayments or accelerated payments. For some loans, there are penalties for prepayments. If you wish to pay extra on your mortgage from time to time or to have accelerated bi-weekly payments to help pay off your mortgage sooner, be sure to ask the lender if this is a possibility for the mortgage you are considering.
Once you have a mortgage and have paid some of it down on your home, you can save by considering a refinance. With refinancing, you can get a new mortgage for the amount you owe on your home now, plus interest rates may be lower. Let’s say you purchase a home for $100,000 five years ago and the interest rate was 5.75. Now, you owe $75,000 on your home and interest rates are at 4% or below. These numbers would definitely see you save money on your mortgage payment. Consider contacting your lender to see how you can save by refinancing based on what you owe as well as with interest rate changes and loan terms.
Another way to save on your mortgage costs is with a down payment. If you are refinancing or applying for your first mortgage, the more money you have to put down, the more you will save. Consider trying to save as much as you can before applying so that you can lower your monthly payment considerably.
When you are considering a refinance or first mortgage, let our experienced staff at Mortgage Guys handle all of your loan servicing needs. We offer competitive rates and loan terms to meet your budget needs as well as home ownership goals. Contact our office today to learn more about the many services we can provide you.