paying down mortgage

What Are the Do’s and Don’ts When Paying Down a Mortgage?

Mar 15, 2018 (0) comment

It’s every homeowners dream to make their final mortgage payment. As an experienced mortgage lender in MA, we find that a lot of people have questions related to paying off their mortgage faster. We will help you understand some of the do’s and don’ts when paying down a mortgage.

List of Do's to pay off your mortgage faster.

• Check the Terms and Conditions of the Mortgage Company

Make sure you check the terms and conditions of your mortgage program before signing the loan agreement. With the hopes of getting closer to your dream of buying a home, you may overlook the terms of your loan. It’s important to check if there is any hidden costs associated or if there is a pre-payment penalty.

• Research Mortgage Refinance Options

Refinancing may be the way to go if you are looking to pay off your mortgage loan faster. Most people look for refinance options for a shorter term. The monthly payments will be higher. If the monthly payment is affordable for you, it can save a substantial amount of money. You need to be sure before applying for refinancing and then approach the best mortgage lender in MA who can offer a comparatively lower interest rate. 

• Reserve Additional Funds to Put Towards the Principal

Homeowners try to save money in order to pay down their mortgage. They often wait until the end of the month hoping that they will have saved money. However, you may find this approach tough and inconsistent as money has a way of getting spent on other things. A good practice is to keep aside some additional money with every monthly payment you make. Doing this will ensure that these additional funds won’t be spent on other things.

• Taxes and Insurance

While paying off the mortgage it’s important that you are aware of your responsibility for handling the payments for the real estate taxes and insurance. Many mortgage lenders in MA handle this by collecting the funds required to cover these expenses in terms of a monthly mortgage payment. You should contact the local municipal corporation to be sure that the bills are sent directly to you from now on.

Let’s discuss the things that you shouldn’t do while paying off your mortgage:
• Paying More Than You Can Afford

It’s common to want to pay down the mortgage balance to save on interest expenses. However, you need to make sure that the mortgage balance is manageable. Your decision to pay off your mortgage should not disturb your household budget. 

• Overlooking the Other Side of the Coin

If you are assuming that paying down your mortgage is your best financial move, think again! Paying off the loan to cut down the interest rate is one side of the coin. You may invest the funds somewhere else that can give you returns at a higher rate than utilizing it for paying down your mortgage. Never make a decision without consulting your financial advisor. Explore the other options for utilizing your funds effectively. 

Following these simple do’s and don’ts will help you payoff your mortgage. Are you are looking for mortgage companies in Massachusetts to help you refinance or pay off your mortgage? Drew Mortgage Associates, Inc. can help! Drew Mortgage Associates, Inc. is a Boston mortgage lender that can help refinance your mortgage to a lower rate. Call Drew Mortgage Associates, Inc. today!

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