Purchasing a home can be one of the biggest investment decisions we make in our lives. It is important to understand how mortgages work since we don't usually pay all the money upfront to purchase a home.
Depending on the type of mortgage you choose (fixed vs. variable, open vs. closed) you can save tons on interest over the life of the mortgage.
One tip is to increase the frequency of your mortgage payments. Instead of paying once a month, choose a bi-weekly payment plan. You cut the payment that you would regularly pay in a month into half and pay it every two weeks. Since there are 52 weeks in a year you actually end up making 13 mortgage payments in a year instead of 12. That extra payment cuts down the amount you pay in interest over the life of the loan dramatically and will allow you to own your home mortgage free years sooner.
With little to no change in your life style you can shave off $1000's in interest. For more on mortgage basics check out this video:
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ReplyDeleteBuying or selling a home is one of the largest commitments many people will take on in their lifetime. The complicated process can be made easier with the help from your staff. The mortgage process can be a pleasant one when the importance of the task at hand is kept close to the heart. Thanks a lot...
Mortgage Note
You're right. It's more economical if the payment plan is adjusted into bi-weekly, especially if you're an employee who has a fortnightly salary (15th and 30th). Through this, you can easily include those payments on the budget along with food and other basic needs.
ReplyDeleteBefore buying a home, it is important that evaluate your job stability and financial status and how big of a mortgage loan you can really afford to pay back. Bear in mind that a mortgage is a long-term, substantial amount of debt that can take a big share out of your monthly income. If your mortgage payments are going up faster than your income, you're just going to rack up a bigger debt or even lose the property in the event of default or foreclosure.
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