Mortgages do not come in a one size-fits-all package. Each homeowner’s present situation is unique and so should the mortgage. Many homeowners’ nightmare is waking up one day and being unable to pay their mortgage. It is therefore crucial that one puts in place measures to prevent this financial draining occurrence from ever happening. This article gives tips to help you stay on top of your mortgage.
Pay Extra Whenever You Can
Have you received a bonus, raise, gift, dividends, tax refund or other unexpected income? Use a part of the money to pay off a part of the mortgage. Always ensure that the extra payments are applied towards the principal repayment and not towards the next month’s mortgage installment. Reduction in the principal amount can significantly reduce your repayment period or your monthly installments. Remember to check with your mortgage provider or reverse mortgage providers as some penalize prepayments within a certain period.
Understand Your Mortgage Facility
Mortgages differ from other loans in many aspects. The terms and conditions of a mortgage are different from those of a car loan, and so on. It is thus important that you research about the financial commitment you are about to make and understand how you can get the best company to work with. mammothinvestor.com gathers and breaks down all the information you need on mortgages and other loans, making sure that you are enlightened to make an informed decision.
Automate Your Mortgage Notifications and Transfers
Avoid hassles of late repayment because a check got lost or you forgot to make an installment transfer by simply signing up for automatic payments and funds transfer from the bank. You should also sync the automated transfers with when your paycheck comes in. This simple action makes the mortgage a lot easier to manage.
Replace Monthly Payments with Biweekly Payments
Instead of making payments of $2000 every month, make payments of $1,000 every two weeks. Since a year has 52 weeks, you will have made 26 biweekly payments in a year, which is equivalent to 13 full
Setup An Emergency Fund
You probably want to direct as much money as possible towards your mortgage repayment, which is right, however, you need a fund from which you can easily pay off repairs and other emergencies that might come up without defaulting on your mortgage. You will be glad that you did this when unexpected expenses arise.
Stay in Touch With Your Bank
Few people like talking to the bank, but sometimes things change and the only way to stay updated is by keeping in touch with your mortgage provider. Doing this can help you learn about new bank products or changes in interest rates, which could potentially help you avoid unexpected expenses and/or pay off your mortgage faster.
Many homeowners dream of successfully paying off their mortgage without getting into default. If you can achieve this, you will get financial freedom and the chance to invest in other assets. With these tips, you will definitely be a step ahead in achieving this dream.