12 Ways to Reduce your Mortgage Payments

If you want to start reducing the overall size of your mortgage payments on a regular basis, you will be happy to know that there are plenty of different ways of doing so. The more of this information you have, the more likely you will be to reduce the amount of money you spend on your house each month.

1. Consider an Exotic Mortgage

An exotic loan product such as an adjustable rate mortgage (ARM) will mean that your payment will be significantly less, but there is still the risk of costing more in the long term than with a fixed rate conventional loan. You will want to take the time to weigh this risk before making a final decision.

2. Look at all Loan Costs before making a Commitment

While it might seem a little bit simplistic, you will definitely want to make a point of looking at all of the costs associated with the loan before making a final commitment. Make sure to ask your mortgage lender to give you all of the documents for the various loan products that are available to you. While the FHA might look good at first, the extra mortgage insurance you will end up paying for it might change your mind.

3. Buy Down your Rate

Buying discount points might seem like a waste of money, but it can actually be a very effective way to reduce your payments if you have the additional money to spare. You can usually buy just one discount point for one percent of your mortgage’s overall cost.

4. Make a Bigger Down Payment

Putting more money down on your loan to begin with can definitely be a good way to reduce your monthly payments, so you will need to keep this in mind as well. The larger your down payment is, the less you will have to pay on a regular basis.
5. Pay all of your Mortgage Insurance Upfront

If you really want to reduce the amount of money you spend on your mortgage each month, you might want to think about paying for your mortgage insurance up front in full. While your lender might not have told you about this option, it can be a good way to go. The savings from doing this can be quite substantial.

6. Reduce your Homeowner’s Insurance Costs

If you happen to have an escrow account, part of your payment will go towards your homeowner’s insurance. The easiest way to go about reducing the cost of your homeowner’s insurance to get quotes from different companies. The more quotes you get, the less money you are likely to pay for it overall.

7. Have your Home Reassessed to Reduce Taxes

The fact is that property taxes can actually make up a big portion of what you pay into your loan if you have an escrow account. If you want to reduce how much you pay on your mortgage, you should think about calling your assessor to find out how to go about lowering your home’s tax assessment right away.

8. Make Bi-Weekly Payments to Reduce Principal and Mortgage Insurance

If you absolutely need to start reducing your monthly mortgage payments right now, you will want to start making bi-weekly payments. You should definitely think about making 26 bi-weekly payments, and your lender can set it up for you so you will receive a regular statement.

9. Pay down your Principal and Remove Mortgage Insurance

Focus on paying down the principal of your loan and take off mortgage insurance. This can be an extremely effective way to go about reducing the amount of money that you spend on your mortgage month to month. Keep in mind that this will really only work with conventional loans.

10. Remodel and Increase LTV to Remove Mortgage Insurance

You can also get rid of your expensive mortgage insurance by doing some heavy remodelling, or at least enough to where you can boost your home’s value and your LTV to 80 percent or below. Just make sure that you don’t make improvements just so you can improve your home’s value unless it has a functional defect of some kind.

11. Have your Mortgage Recast
Recasting your home loan might be a good idea if you have been making extra payments but something has gone really wrong in your life. Ask your bank to recast your loan so the money you still owe will be stretched out over 30 years.

12. The Home Affordable Modification Program (HAMP)
If you are going through some very financially challenging times and need to lower your mortgage payment, there are a number of federal loan modification programs available. Take the time to look into some of these programs, as one of them could help you out a lot.

10 Important Things to Remember About Credit Cards

Credit cards can definitely be a huge help, but you will need to make a point of learning all you can about them and how to use them. The more of this information you get, the better your chances will be of avoiding debt going forward. Millions of people get into credit card debt each year because they simply didn’t know enough about credit cards to begin with.

1. Avoid signing up for too many cards

The last thing you want to do is to sign up for every credit card that comes your way, because doing so it could affect your credit negatively. Those who have a lot of cards put themselves at additional risk for credit card debt, so you will need to keep that in mind as well. The first thing that you will want to ask yourself is if you really need a new credit card at all before signing up for one.

2. Maintain an Outstanding Balance of Zero Dollars

One of the best things that you can do when it comes to using a credit card is to keep your outstanding balance down to $0 as much as possible. You will have a few days to pay off the balance of your card without worrying about interest, but if you go beyond that then you will end up spending a lot more.

3. Avoid the habit of Making Minimum Payments

You will definitely need to avoid getting into the habit of making minimum monthly payments on your credit cards. This is an effective way to accumulate interest really quick, so you will want to pay as much as you possibly can. Even if you think you may have off a certain amount of your credit card balance, you will only have paid off just a portion.

4. Don’t Miss any Payment Deadlines

It is important that you do not miss any payment deadlines with your credit cards. Missing even one payment deadline can spell serious trouble for you, so it’s therefore crucial that you make a point to pay your bills on time every single time. If you have a lot of credit cards, you may want to set a monthly alarm on your phone to keep track of all the different deadlines.

5. Double Check your Statement

You should always make a point of checking and double checking your credit card statements, because you want to make sure there aren’t any transactions that shouldn’t be on there. Sometimes mistakes happen, so you will therefore need to make sure that you look out for this. By taking a close look at your credit card statement each month, you will be able to stay on top of all your expenses.

6. Always Report lost or Misused Credit Cards Right Away

You don’t want to wait to report any lost or stolen credit cards, because doing so could result in a lot of charges that you didn’t authorize. If you cannot find any of your credit cards after a couple hours of looking around and making phone calls, don’t hesitate to cancel them. In the end you will be very glad you decided to do this.

7. Do not Withdraw Cash from your Credit Card

You should also avoid withdrawing cash from your credit card, because your credit card company will most likely charge you quite a bit for an advance. You will be charged either 2% or 4% for a withdrawal cash advance fee, which you definitely won’t want to pay.

8. Refrain from using your card just to get rewards

While it may be tempting to charge your credit card whenever possible so you can earn free airline miles and other things, it’s not necessarily a good idea. The fact is that you have to spend a lot of money with your cards to really earn a reasonable amount of points. The interest that you’ll end up paying on your card might not be worth it in the end.

9. Negotiate with your Credit Card Company

If you have a history of being a good customer with your credit card company, you will definitely want to think about negotiating with them for a lower interest rate. Most credit card companies are very willing to do this, but you will need to come to them first. In the end you will definitely be glad you decided to do this because of how beneficial it can be.

10. Call in Advance if you are struggling to pay off a card

You do not want to wait until you are already deep in debt to make the call to your credit card company. If you don’t think you will be able to pay off the balance on your card, make sure that you call the company ahead of time. They will appreciate you doing this and will probably be willing to work with you to help get it paid off.

How to Pick the Best Lender

There are many lenders available these days and if you want to borrow money, it can be difficult to know which one to choose. Even when you have decided what sort of loan will be the best for you, you will still find that there is a lot of choice.
Many people will go to a comparison website to pick between lenders. This can be a good idea but it is worth being aware that most sites will only show results for companies that pay them commission. This means that they may not necessarily be showing you the best or cheapest but just the ones that they want you to sign up with. If you do decide to do this, try to find a comparison website that looks across more than just those lenders that pay them; there are a few out there. Also look at more than one, as they may not always include the same lenders. There are also some companies that never appear on comparison websites. It is worth trying to find them and getting quotes from them as well as they could be cheaper.

If you want to get expert advice then a financial advisor could be a good idea. They will look at all companies, as long as they are independent, and they may even have access to different deals than you can use yourself. They will charge you though, usually a fixed hourly rate, but this could be well worth paying if they find you a really competitive rate. If you are buying a mortgage, for example, then this will be very costly in the long term and so paying a bit for financial advice will be worth it. If you are getting a short term loan then it may not be worth it as the differences in cost could be quite small.

It is worth considering that price should not be the only factor you consider when comparing lenders. Although looking at price is very important as differences in interest rates and fees could be significant, it is worth noting that there are other factors that you should consider as well. One still related to costs is any additional fees that might be charged. As well as a set up fee or administration fee, there could be an early redemption fee, non-payment fee, late payment fee and things like this. It is worth looking in the terms to check for these and compare them. Hopefully you will not be paying late or missing payments, but there is a chance that this could happen and it is worth checking out the cost. Hopefully you may want to pay the loan back early, so it is worth looking to see how much that will cost you.

It is also worth thinking about the lender themselves. Consider their reputation, what you know about their customer service and what other people might think of them. Chat to friends and family about their borrowing experiences and read online reviews. You will find negative reviews of all lenders as no one is perfect, but the good should hopefully outweigh the bad on the ones that you like. Also speak to their customer services and get a feel for what they are like to deal with and how helpful and friendly they are. Find out more about them, ask about charges and rates and things like that so that you can easily compare them. Make sure that the advertised rates are the ones that you will be given should you sign up with them. Take a look at their website as well and get a feel for them. Consider whether having a local branch is important to you and if I is, then visit it and chat to staff there to see how you feel about it. You will be able to judge how friendly and helpful they seem, how busy it is and generally what you think of the place.

It can be difficult picking a lender, but many people do it very quickly. If you are borrowing a lot of money then you need to consider that you will be dealing with them for a long time. It is worth making sure that you are making the right decision as it may not be easy to change lenders once you sign up. Although swapping may be possible, if you have a large early redemption fee or your credit rating goes down, it may be very difficult to do this and therefore it is best to get it right to start with.