Save Money on Your Mortgage

So you have finally found the house of your dreams, but don’t even want to think about all the money you will be paying in interest to borrow. You’re not alone. Below are some tips to help you save money while you pay down your mortgage:

• Increase your payment frequency: With a mortgage, increasing your payment to bi-weekly or weekly will reduce the amount of interest you pay over the long run and you will pay down your mortgage faster.
• Shorten your amortization: If you can afford it, you could shorten the number of years it will take for you to pay off your mortgage. A shortened amortization means higher mortgage payments, but you will pay less interest over time.
• Round up your payments. By rounding up your payment amount to the closest one hundred dollars, you will save hundreds, if not thousands, of dollars in interest and pay down your mortgage faster.
• Use your pre-payment privileges: Mortgage pre-payment privileges help you pay off your mortgage faster and reduce your interest costs. Prepayment privileges differ from lender to lender. Ask your mortgage broker to explain your options.
• Roll high-interest debt into your mortgage: You can use the equity in your home to consolidate your other high interest debt such as credit cards. By consolidating all of your debt into a new mortgage, you can make fewer payments, save money on interest costs, and improve cash flow. You can then consider using the money you save each month to pay down your mortgage faster.

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