Many people refinancing mortgage constantly looking for easy ways to lower their mortgage time frame. The most common type of loan is a 30-year fixed loan. Many people pick this loan because of the payment terms and flexibility. Although people pick the 30 year loan, they would like it to be less time inclusive.
There are many programs out there that claim they can reduce the time frame on paying back your loan. Many more claim they can save you thousands of dollars on your home loan. refinancing mortgage after they advertise this, they say it only costs $99-$299 to enroll. Funny as this may seem, I do not remember it costing money in order to save money.
Most programs that people here of are bi-weekly payments. For the most part, these are doing nothing to decrease your overall mortgage loan. The reason this is being said is because most lenders do not apply it correctly. Before you sign up for a program, make sure you do the following:
1. Make sure it is free: there is no reason why they need to charge you any money to enroll.
2. They actually "Apply" the payments every other week: this is the important aspect. They might be collecting your money every other week, but that does not mean that they are applying it to your mortgage every other week. If they do not apply it, they are just breaking your payment down into two payments a month-which does not affect your overall mortgage.
You will find that most lenders are not actually applying the payments as they receive them. If this is the case you are in, stop this route and try one of the ones below.
Effective Ways to Lower Your Mortgage
1. Make an extra principal payment a month: You can make an extra principal payment a month in any amount you desire. The key to making this principal payment is to write the amount on a separate check with the words "principal payment" indicated in the memo section. With technology, you can also do this online. It is always important to label it separately just in case research needs to be done on it.
2. Make an extra monthly payment every year. You can lower your mortgage significantly each year by simply making an extra payment.
Whichever way you decide to send in extra money, it is important you document it and follow up on it. Most lenders will have online statements. On these statements it shows principal and interest payments. If you just send in an extra payment and do not indicate that it is for principal only, they will apply it to the principal and interest aspect of the loan automatically.
Remember, the bank took on your loan as a way to make money. Their money comes in the form of interest over the years. They do not want to see you pay the amount down over the years, so they will make sure they are not making it very easy on you. It is your responsibility to keep up on it and correct any errors.
Locate more information about the Anchorage Alaska Real Estate market or search the Anchorage MLS on Ryan Tollefsen's Alaska Real Estate web site.
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