Buying a home is definitely a dream everyone wishes to realize, but this is not always easy, especially if you want to buy it in cash. The most affordable and easy way most people purchase homes is by taking out a mortgage. But this comes with the challenges of adding to yourself a debt, which could put pressure on you and probably curtail you from achieving other goals such as sending your children to school, taking a vacation, or retiring earlier.
The earlier you get to pay off your mortgage the better off you will be going forward. Does this sound so impossible that you get a feeling that you cannot achieve it? Well, going through the following expert tips on managing a mortgage from Mortgage Funding Direct can help you pay your mortgage off within a record time and have peace of mind for the rest of your life.
Purchase a Home You Can Afford
Everyone wishes to have the best home there is, but this comes with a cost. Before you get to buy a home, you will have to get pre qualified first. During the consideration, the lender or finance company will consider your financial situation and determine the size of the loan you are likely to qualify for. But the best method is to approach a financial advisor or a mortgage broker to help you crunch the numbers and advise you accordingly.
Crunch the Numbers
If you are comfortable with numbers, take a look at your statement or the mortgage rates and any other fees to see if you can afford the kind of loan you are looking at. Consider the period you need to pay off the mortgage. If you are a hands-on person, using an established Excel formula will help you arrive at the answer easily. Called the PMT formula, it will help you know the number of months you’ll need to afford if you have to pay it within the specified period.
Pay Down Other Debts
The rule of thumb is always to pay off the most expensive debts first, experts at Mortgage Funding Direct advise their clients. This is so that the interest accruals do not pile up as quickly. This will save you more money and allow you enough opportunity to clear the remaining debts easily and quickly.
Make Extra Payments
Whenever you pay more than your monthly payment, the extra is applied to the principal balance, thus reducing your subsequent interest amounts. Some ways you can do this include:
Making extra payments every quarter and saving money on reduced interest. Do this by dividing your payment by 12 and add the extra amount to each periodic payment. Alternatively, you can make half monthly payments every other two-week to realize a dramatic reduction in the number of years you will pay your loan. Lastly, you can round up or increase your payment whenever you have a windfall or a bonus to reduce your mortgage balance.
You will need to consult your mortgage company about extra payments before making such commitments so you are sure your payments are making financial sense.
Make Use of Your Tax refund
It is important to pay extra money towards your mortgage for as long as your mortgage lender accepts, experts at Mortgage Funding Direct say. But this is always easier said than done. One strategy that you can use to make this possible is using your tax refunds to settle the principal mortgage every year. Making a large extra payment of say $3,600 every year has the same benefits as making an extra $300 monthly payment. This can significantly reduce your repayment period by up to 2 years depending on the number of monthly payments stated in your mortgage contract.
Why You Need to Use Mortgage Funding Direct
To be on the safe side, you need to work with a reputable company that has been tested for years. At Mortgage Funding Direct, you are guaranteed expedited pre-approval and an automated underwriting process that only takes a few hours to get the results. In addition, the approach experts take is a one-stop one. This means they are committed to working with and for you to help you achieve your investment goals. Most importantly, they keep you posted on the progress of the application and assessment of your personal financial picture. They are always willing to explain every detail in the best possible way and advise clients on the practicable options. They have many years of combined experience. Experts at Mortgage Funding Direct are licensed and skilled in offering an array of financial programs whose goal is to find the best mortgage options for their clients.
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