One of the largest single expenses that a person will have in their lifetime is their home, and their mortgage payment eats up a very large portion of their pay. Most people have no idea that there are means to actually lower the cost of their mortgage and so never even try. The truth is, however, that there are at least 4excellent methods to do it. Take a look below to read about them.
If your mortgage has an interest rate of higher than 5% you should definitely consider refinancing. If you have a good credit history a refinanced loan could save you hundreds of dollars per month and thousands per year.
In 2011, for example, CreditSesame.com performed a survey and found that nearly 12 million homeowners with excellent credit ratings were, on average, overpaying their mortgage by over $430.00 per month! Over a 10 year span that means a savings of more than $49,000.00!!
When you decide to refinance you will most definitely want to shop around for the best price. The fact is, like a car loan or any other major purchase the banks want your money and are willing to negotiate for it. If you simply go to several banks and let them know that you are shopping around for the best price you’ll be surprised what they are willing to do for you.
Women should bear that in mind because it was found that, much more so than men, women don’t shop around and thus pay higher mortgages.
Checking your credit report is also a great idea but do it before you begin to look for your new mortgage. (You’re entitled to a free report every year.) Your credit history will greatly affect your ability to negotiate your refinancing, and the fact is that nearly 70% of all credit reports have mistakes as per a Consumer Reports study.
Finally, before you go for that refinancing make sure to get your home into shape. Minor repairs and basic home maintenance are a must today because, more than likely, your lender will send a rep to your home to check it out before approving the new loan.
There you go! 4 ways of reducing the cost of your mortgage that could possibly save you thousands of dollars. Put them to work for you and start saving ASAP!