Mortgage Refinancing

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.

Whether you’ve been thinking about ways that you can draw on your home equity to fund a renovation project or you want to take advantage of low interest rates before they rise again, refinancing your mortgage is an excellent option.

In today’s blog post we’ll introduce mortgage refinancing and discuss a few of the ways that you can use this tool to help accomplish your financial goals.

Cash-In and Cash-Out Refinancing

Many homeowners refinance their mortgage in order to take some of the home equity out for other purposes. In a “cash-out” refinancing, you take out a new mortgage loan which is greater in value than your current loan. After paying off the existing mortgage you’ll receive a check for the difference which can then be reinvested in home upgrades or put to use elsewhere in your financial portfolio. You may also be able to get a better interest rate in this type of refinancing, saving additional money over the long term.

Do you owe more on your mortgage than your home is currently worth but still want to take advantage of lower interest rates? If so, “cash-in” refinancing is an option that can help you to avoid the mortgage insurance costs that you may be facing when you refinance. As the name implies, cash-in refinancing will provide you with a loan that is for less than the amount that you currently owe, so you’ll need to add “cash-in” to make up the difference.

Home Affordable Refinance Program or “HARP” Refinancing

If you find that you’re unable to refinance your mortgage as the value of your home has declined, the federal government’s Home Affordable Refinance or “HARP” Program may be an option. HARP was developed to assist homeowners in the wake of the 2008 financial crisis and the resulting instability that was caused in the real estate and mortgage markets. If you have been making your mortgage payments on time, have a mortgage guaranteed by Fannie Mae or Freddie Mac and your current “Loan to Value” ratio is greater than 80% it’s likely that you’ll qualify for HARP refinancing.

The above are just a few of the ways that you can refinance a mortgage to better suit your needs and financial goals. Contact your local mortgage professional today to learn more about refinancing and to discuss how you can tap in to the home equity that you’ve built up over time.