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How To Pay Off Your Mortgage Faster

Jeff W — Wed, 20 Jan 2010 11:00:16 +0000

How To Pay Off Your Mortgage Faster

For most of us buying a home is the biggest financial decision we will ever make so it goes without saying that before we sign our name on the mortgage paperwork, we should do a good deal of research to not only find the lowest rates and the best terms, but we need to also determine how to pay off your mortgage faster so we can establish more equity in our home and eventually be free of a mortgage payment all together. This article contains a few tips on how to pay down your mortgage faster and help keep more money in your pocket.

Increase Your Monthly Mortgage Payment

Increasing your mortgage payment each month can not only speed up your mortgage payoff significantly but it will reduce the amount of interest you pay every month on your mortgage. Without confusing the topic with specifics and numbers, the bank charges you for every day that your loan is outstanding, and is typically calculated over a period of 30 years. If you pay back the bank sooner, in 20 years for example, the bank will charge you only for 20 years worth of interest rather than the full 30 years worth. On a mortgage loan of hundreds of thousands of dollars you can save tremendous amounts of money over the course of the loan.

Make Biweekly Mortgage Payments

Biweekly mortgage payments are confusing to some people, but they are really quite simple. Each day your loan is outstanding the bank charges you for interest, and every time you make a payment the amount of principle you owe is reduced by that amount. When you make normal monthly mortgage payments you pay 30 days worth of interest, but when you make a payment every 15 days your principal amount is that much lower at the end of the month, meaning the bank will charge you much less in interest over the long term. It doesn’t sound like much but paying your mortgage biweekly can save you tens of thousands of dollars over the life of your loan. The downside to paying biweekly however is you need to be sure you have enough cash on hand to make your payment every two weeks and this can be a challenge to some homeowners living paycheck to paycheck.

Refinance Your Mortgage Whenever Possible

Over the last few years mortgage rates have reached record lows and if you haven’t looked in to refinancing your mortgage you could be flushing away thousands of dollars. Over the life of a 30 year mortgage, interest amounts to nearly two to three times the value of your home, depending on your interest rate. If you have an opportunity to lock in a lower rate and cut down the amount of interest you pay youd be crazy not to. This is doubly true if you have a variable rate mortgage and plan on staying in your home for a long time. To be fair however, refinancing your mortgage isn’t for everyone though, if you don’t plan on staying in your home for a long period of time the amount the bank will charge you to refinance may not be worth the potential interest savings you will gain by doing so. Be sure to ask your mortgage agent for an amortization schedule before and after the refinance and make sure that you will be saving more than the bank will charge.

As you can see there are a number of ways to pay off your mortgage faster, most of which involve paying more money down toward the principal every month and/or cutting down the amount of interest you pay. Cutting a quarter of a point off your mortgage rate doesn’t sound like a lot but when applied to a $300,000 mortgage and taken over 30 years it can save you over $17,000 worth of interest. I’d say $17,000 is enough motivation to learn how to pay off your mortgage payment faster wouldn’t you?

How To Pay Off Your Mortgage Faster

Pay Off Debt Fast: Five Easy Ways To Save Money

Jeff W — Mon, 18 Jan 2010 16:16:11 +0000

Pay Off Debt Fast: Five Easy Ways To Save Money

As a society we’ve never had larger amounts of debt, and the numbers just keep increasing. More and more consumers have credit card debt in high enough amounts to buy a fancy car, and we have some serious trouble trying to pay off debt fast. The good news is there are ways to sock away more money and help improve your personal budget. Here are five painless ways to save money and pay off your bills faster.

Reduce Monthly Bills

We have a variety of monthly bills that we pay, things like the mortgage, utility bills, cable, telephone and much more. Many of these bills don’t seem like much by themselves but together can really place a strain on your personal budget. If you are looking to pay off debt faster, try either eliminating or trimming down these monthly expenses. For example, do you have pay channels you rarely watch on your cable bill? If so, cancel it! Perhaps you pay for both a home phone and a cell phone but only need one or the other. Monthly expenses really can add up quickly and are hard to spot when you wonder where your paycheck goes every week. Eliminate these monthly expenses and apply this money toward paying down your credit card balances.

Dine Out Less

I don’t know about you but I spend way too much on dining out every week. We all lead busy lives working our jobs, taking care of the kids and shuttling around running errands so the last thing we want to do is cook a big meal and it’s much easier to order out, but unfortunately dining out on a regular basis ads up quickly and prevents you from paying down debt instead. Assuming you can cut back one night a week of dining out (estimated at $30), you can save almost $1,600 a year that can be used to pay off credit cards faster.

Go Grocery Shopping More Often

Going shopping more often seems counter intuitive to saving money and lowering your personal budgets but grocery shopping may be an exception. When you go shopping for the week do you buy things that you never end up using or throw away? When you waste groceries, especially meats and other expensive items, you are making it hard to save more money. Simply by going shopping on an as needed basis you are less likely to waste money and be able to improve your personal budget much easier.

Sell Items You No Longer Use

Do you have items worth a decent amount of money lying around that you never use? Why not sell them and use that cash to pay off credit cards faster. With popular websites like Craigslist, Ebay or even your local newspaper’s classified section, it’s easier than ever to find someone interested in buying your used stuff. You can sell anything from books to musical instruments to something as big as a car or a boat that you never use. If you aren’t using something that you can sell, put it on Craigslist for free and use that cash to pay off your credit cards. Heck, if you can sell a car or a boat you may even be able to pay off your mortgage faster. That would go a long way in reducing monthly expenses.

Use Coupons For Everything

I know coupons aren’t popular, especially for macho guys (after all we usually associate 85 year old grandmothers but using coupons) but you can save a lot of money every day just by clipping out a little piece of paper. Advertisers are willing to give you big discounts on products you buy anyway so why not take advantage of this? Just by checking my Sunday paper every week I save an average of $20 a week. What’s better is that many companies are offering online coupons that you can print and take with you. Even better than that, many large retailers like Amazon offer coupon discount codes for things you buy online. Before you buy anything online, do a quick search for “[product name] coupon” and see what you find. It’s not uncommon to find a 15% off coupon in less than 30 seconds of searching. Take advantage of all of these and put that money on your credit cards and pay off your debt easily.

Pay Off Debt Fast: Five Easy Ways To Save Money

What is The Minimum Required Credit Score For a Home Mortgage?

Dipak V — Tue, 11 Aug 2009 00:46:56 +0000

What is the minimum required credit score for a Home Mortgage?

Not so long ago, getting a mortgage for a home was very easy. It didn’t matter whether you had bad credit or good credit, all you were supposed to do was sign a paper and show some income and you could easily be able to own a home. Because of this we are currently suffering the consequences, one of which is the immense housing market meltdown.

Today you can get great rates if you have the credit score Companies like that offer great rates like a 5.125% rate on a 30 year mortgage (at the time of this writing), but only if you show them that you’re responsible enough for them to loan money to, and you do this by showing them a good credit score.

The willingness of the creditors to give a loan to people who would not be able to pay has definitely caused a lot of problems. Therefore nowadays, it is quite common, that people ask themselves: What is the minimum credit score home mortgage?

The way I see it, if your credit score is below 650, you are bound to find it much harder getting approved for a mortgage with “good” terms and conditions. Don’t get me wrong, this does not mean that if you try to improve your credit score before applying for a mortgage it will not help. Basically, the main advantage with improving your credit score is that your approval chances (rating) will increase.

On the other hand, making minimum payments is kind of “ok” but it shows no effort to pay more. If you cannot pay off an entire credit card, at least make sure you are not “maxed” out on any. I really recommend you pay down credit cards to within at least 25% of their maximum allowed limit. This will demonstrate the creditor that you are less likely to over extend your credit, therefore being a responsible and trustworthy borrower.

LendingTree helps save money because they send your application to multiple banks and let them fight it out for your business. What this means for you is that you get the best rate because they impartially shop your loan to all sorts of lenders, some that will accept less than average credit. They also do FHA loans if you qualify for them.

The exact credit number and mortgage approval can vary but normally a credit score of round about 650 or higher will make things much easier for you. Although it is not impossible to get a home mortgage with a credit score lower than 650, it will just take a little more patience and research and we all know that time is money!