Tuesday, December 1, 2015, AM | 1 Comment
As a homeowner or a first-time home buyer, you have no doubt had second or perhaps third thoughts about committing to a decades-long mortgage loan agreement. This is natural as most traditional mortgages stretch out for 30 years.
If you have ever wanted to know if there were any sneaky ways to pay off a mortgage early or shave a few dollars off your monthly mortgage payment, then the following solutions are for you.
Consider an Exotic Mortgage
Choose an adjustable rate mortgage (ARM) if you are certain that you are likely to sell the house and move within a few years.
Choose a fixed-rate mortgage if you are certain that you are likely to stay in the house for ten years or more.
In all other cases, have your mortgage representative show you loan products that can help you optimize savings based on the amount of time you realistically expect to live in the home.
If You Qualify, Leverage Your VA Benefits
Among the benefits earned by serving in the military is housing assistance lent by the Veteran’s Benefits Administration.
If you served in the military, VA-approved lenders can save you money on purchase money loans or refinance mortgages.
The VA loan specialists at Low VA Rates suggest that you consider a VA Hybrid Arm loan. This type of loan combines the best of all the VA has to offer.
Civilians are not eligible for these special offers. Hybrid ARM loans have a fixed-rate feature that is far below that of comparable 30-year mortgages, yet they also have a variable component that saves you money when rates go down.
Use a Professional Tax Preparation Firm
Homeownership is looked at kindly from the standpoint of the IRS. Homeowners enjoy certain tax benefits available to no other group of taxpayers.
The IRS does this to encourage people to own rather than rent. Sadly, the economic theories behind real estate tax deductions are often difficult for some homeowners to understand.
As such, they go ignored. Rather than lose out, consider investing the money to have a professional prepare your taxes.
In this way, you will reap the full benefit of all your legal deductions. Then, take your new-found savings and make a one-time principal prepayment on your mortgage balance.
Lower Your Homeowner’s Insurance Costs
When you take out a mortgage, the cost of your homeowner’s policy will be folded into your mortgage payment.
One way to lower your house payment is to reduce the cost of this insurance.
You do this by choosing a coverage amount that accurately reflects your potential losses. According to the Insurance Information Institute, the land under your house cannot be stolen or burn down in a fire.
For this reason, you do not need to include its value when choosing how much coverage you want to buy.
To save money, purchase just enough insurance to cover the replacement value of your home exclusive of your land.
Homeowners and home buyers trying to get by in today’s economy face some hard choices.
Although interest rates remain at or near historic lows, mortgage loan borrowers continue to be confronted with a dizzying array of credit products whose complexity can bog them down to the point of indecision.
By adopting one or more of the aforementioned tips, the typical mortgage borrower can save a bundle of money over time or even every month.
Anica Oaks is a Freelance writer and web enthusiast. Read some of her published work on her Google+ page.