07
Jan
By support
Home Mortgage Tips

It’s 2015! Get a Jump on Your Payments with Our Quick Guide to Paying Your Mortgage off Sooner

It's 2015! Get a Jump on Your Payments with Our Quick Guide to Paying Your Mortgage off Sooner With the start of the New Year, it’s common to set new resolutions. While there are many goals that are worthwhile, paying off your mortgage as soon as possible can significantly improve your financial position and is a great goal to aim for. With that in mind, let’s take a quick look at a few helpful tips for paying your mortgage off sooner.

Refinance To A Shorter Mortgage Term

For example, switching from a 30-year mortgage to a 15-year will get your mortgage paid off in half the time it would have originally taken, and it will also lower the total amount owed. By switching to a 15-year mortgage plan, you can save well over a decade’s worth of interest payments.

Carefully Consider How Much Space You Need

Many people have more home than they can afford. By downsizing to a smaller, cheaper house, you should be able to pay more than your minimum payments each month. Other nice perks, such as saving money on heating and air conditioning, may also be able to help make the goal of paying off your mortgage seem more attainable.

Make Payments Every Other Week

Mortgage companies often give borrowers the option of choosing to make payments either every month or every other week. If you opt to pay every other week instead of every month and have a standard, 30-year mortgage, you’ll be able to pay off your debt about six years sooner than expected.

Cut Expenses

Find a regular expense in your budget that isn’t a necessity and start using that money towards your mortgage instead of what you would normally spend it on. For instance, bringing lunch to work each day instead of eating out could easily save a person at least $100 per month. That’s over $1,000 per year!

Set Extra Money Aside

To pay off your mortgage quickly without having to cut regular expenses, use overtime income, holiday pay and gift money for extra mortgage payments. This way, you can pay down your debt without having to lower your standard of living. Another option is getting a part-time job for a few hours each week and putting the extra income towards your house.

There are many things that you can do to pay off your mortgage quickly, but you don’t have to do them all. Whether you choose one tip from this list or all five, you should be able to start making progress on your loan. For more information about reducing your payments, be sure to contact your mortgage professional today.

06
Jan
By support
Home Mortgage Tips

FICO Scores: How Does Your FICO Score Impact Your Mortgage? Let’s Take a Look

Homeowner's Insurance: What's Covered, What Isn't and Why You Might Need It Homeowner’s insurance is an incredibly valuable and beneficial policy for homeowners to have, but it is necessary to understand what traditional policies do and do not cover. Once you familiarize yourself with the intricacies of various plans you will be better educated to make the proper decision when selecting your desired level of coverage.

What’s Covered In Homeowner’s Insurance?

The majority of homeowner’s insurance plans will cover dwelling and other structure protection, personal property protection, natural disaster protection, and bodily injury liability protection. Dwelling and other structure protection plans cover damage to your home and other structures that are directly connected to the home, such as the garage. Personal property protection covers damage or loss of personal property within the dwelling. Natural disaster protection covers your home should a natural disaster cause damage, but note that natural disasters such as flooding and earthquakes typically are not covered. Finally, bodily injury liability protection typically covers injuries to individuals while on your property.

What Is Not Included In Homeowner’s Insurance?

As mentioned above, two of the major natural disasters that are not covered by homeowner’s insurance are flooding and earthquakes. There are specific insurance plans that cover flood damage and earthquake damage, but you’ll find that the vast majority of common homeowner’s insurance plans do not cover these types of disasters.

Homeowner’s insurance does not typically cover home business equipment either. If you are running a business from within your home, small business insurance is required to mitigate your risk.

Personal property over a certain value is also not typically covered unless supplemental coverage is purchased. Items such as expensive musical instruments, artwork, jewelry, and silverware should have their own insurance policy which is dedicated to valuable personal property.

Why You Might Need Homeowner’s Insurance

Homeowner’s insurance is intended to help protect you against the unexpected. You never know when a natural disaster such as a tornado or a lightning strike which causes a fire within your home might occur. Accidents do happen, and a visiting friend or relative can be injured on your property. Homeowner’s insurance is a great protection plan to have to make sure that both you and your property are covered should disaster strike.

When you’re ready to buy your next home, be sure to contact your local real estate agent to leverage their advice and expertise. Your agent will also be able to refer you to the best place to get homeowner’s insurance for your new home.

30
Dec
By support
Home Mortgage Tips

You Ask, We Answer: What is Private Mortgage Insurance or ‘PMI’ and How Does It Work?

You Ask, We Answer: What is Private Mortgage Insurance or 'PMI' and How Does It Work? For many homeowners, their mortgage payment contains more than just principal and interest. A little something called PMI could be representing a significant portion of that payment, and it’s important for home buyers to understand this cost.

What Is PMI?

PMI stands for private mortgage insurance, or sometimes just mortgage insurance. However, it isn’t intended to mitigate risk for the homeowner, but rather the bank.

Statistics show that when a home buyer puts less than 20% down on a home, he/she is much more likely to default. So, requiring these buyers to carry PMI helps the bank hedge their losses in the event of a default.

It’s important to note that the home buyer doesn’t shop for PMI; this is all taken care of by the lender. However, the cost of PMI should be calculated out well before closing to help the home buyer be aware of his/her final mortgage payment.

Who Needs PMI?

Who will need to carry PMI depends on factors like the credit rating of the buyer and the exact mortgage being sought out. However, it’s safe to say that most home buyers with less than a 20% down payment will be required to carry PMI.

Does PMI Ever Go Away?

Eventually, PMI can be removed from a mortgage once enough of the principle has been paid down or enough years have passed.

It’s important for home buyers to fully understand the terms of their PMI requirement. Sometimes, it will be automatically removed once 20% of the house has been paid off, while other times, refinancing may be required.

Should Those Who Cannot Put 20% Down, Not Buy A House To Avoid PMI?

Unfortunately, this is not an easy question to answer. Yes, PMI is an extra cost that needs to be calculated into the cost of the home – but putting off a home purchase isn’t necessarily the right course of action.

For many families, it’s financially challenging to save up 20% of the cost of a home. After all, in 2010, the median home price of new homes sold in America was $221,800. A 20% down payment on such a home would be $44,360.

However, many find that it’s still cheaper, or just financially wiser, to buy a home with PMI than to continue renting. Each potential home buyer should call their mortgage professional to get more information about market trends in their area and to decide the appropriate course of action.