Mortgage Lowdown

So you want to be debt free and want to be lord and master of your own home. Here are a few tips that will help you get there:

• Shorten payment period: Implement this method only if you have enough disposable income with you. Here, instead of making monthly payments on your mortgage loan, you will have to make bi-weekly payments. That this is an excellent method of hastening up the payments can be gauged by its popularity.
• Lump sum: You don’t want to be hassled with maintaining records of bi-weekly payments. No sweat. All you need to do is make payments in lump sums. If you get a bonus at work or money from some other source, you could use it to make lump sum payments against your loan. However, for this method, you need to first contact your lender and find out if your contract allows you to do so. Depending on the contract you’ve signed with your lender, you may only be able to make large payments at certain times.
• Shorten loan period: If you’ve taken a 30-year mortgage but feel that you are earning enough to repay the loan faster, you can shorten it to a 15 year mortgage. But don’t forget, you will have much higher bills.
• Lower the interest: Intrigued? Well you can lower the interest of your mortgage loan. All you need to do if you have a 30-year mortgage is make payments towards the principal amount. That is your funds that were supposed to be paid for interest can go towards reducing the principal amount of loan. However here too, just like before you must talk to your lender and find out if this strategy works for you.

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This entry was posted on Thursday, June 8th, 2006 at 6:10 am and is filed under Banking. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.