How to reduce mortgage payments without refinancing debt

There are several ways to reduce the mortgage payments and keep cash in your pocket. Normally, you would need to refinance debt that the rate is lower. However, this process is expensive and some do not have the money. In some cases, lenders may be willing to reduce the amount of debt without refinancing.

  1. Learn how you can reduce mortgage payments without refinancing the debt. (Image: Housing, Mortgage, Foreclosure Real Estate concept or image by Kathy Burns-Milliard from Fotolia.com)
  2. Document your financial difficulties. In order to reduce mortgage payments without having to refinance the debt, the lender can restructure the loan. However, not everyone qualifies for this benefit. Before the application is approved, the entities will review your financial situation and determine whether or not you qualify for help. Some legitimate reasons include loss of employment, illness, injury or disability. You must keep copies of the accounting records, including pay stubs, bank statements, bills, unemployment compensation.
  3. It acts immediately. Instead of waiting for the situation you out of your hands, you should contact the mortgage company as soon as you detect signs of potential problems. The reduction process payments without refinancing is long and can take weeks to get approval and finalize the paperwork.
  4. Requests a loan modification. One type of restructuring is the mortgage modification, whereby the lender agrees to reduce the interest rate or extend the loan term to reduce the amount of payments. The entity may suggest this alternative. If you do not, you can request it.
  5. It presents a proposal. You can ask the bank to convert the interest or adjustable rate into a fixed, or you can request a loan extension fee. In some cases, an entity may temporarily suspend payments for a specific period of time.
    Negotiate with the lender; some may not accept the proposal. Organized a meeting to discuss possible options.

Tips & Warnings

  • If you meet certain conditions, owe more money than the value of the property or have a debt exceeding 31% of your monthly gross income, you may qualify for a loan modification in accordance with the program of the federal government of the United States America Making Home Affordable.

Mortgage bridge

With a bridge mortgage you can join 2 mortgage loans in use only until the house is sold.

The fees payable by the user are less than 2 mortgages and gives the user a time to sell the house that already had mortgaged.

Buying a home is a great decision. The mortgage payments, the costs associated with it and the related products are expenses that must be counted when choosing the house and the loan that is needed. When you buy a house you choose the one that fits the needs of the future owner. It is possible that at the time of acquiring it only two rooms are needed, or a particular area of ​​the city is preferred, but later a larger house is required or in another area or locality. What if, with the passage of time, but still having part of the mortgage, you decide to buy another home? Is it necessary to sell the first to be able to buy the next one? The answer is “No”. To solve these crossroads exist the bridge mortgages.

Buying a home while you are paying for another

Through a mortgage loan a credit institution lends the user an amount of money in exchange for it to be returned in the long term through installments along with interest. In the case of non-payment of the mortgage, the bank can keep that address in order to recover the amount that is pending collection.

When buying a second home when you are still paying for another, there are 3 options:

  • Wait to sell one to buy the other: it may mean “losing” the one you want to acquire because the time needed to sell a home can be lengthened.
  • Request a new mortgage: it would face the payment of 2 mortgages and it is common to find difficulties when an entity grants the client a mortgage having another in force. Banks usually request that the user have a minimum of 20% of the purchase price and another 10% for expenses, and this is dedicated to the purchase of the first home, so it will require a very high income to achieve a second.
  • Hiring a bridge mortgage : this way it is not necessary to sell the mortgaged home first, since two guarantees are acquired in a single loan: the one of the house that is already being paid and the one that is wanted to buy. This gives a term of between 2 and 5 years to sell the current house.

How does a bridge mortgage work?

With this type of mortgage loans the same entity grants a single client 2 mortgages (in a single) until he sells the first home. Until that happens, the user can pay a reduced fee that equals the interest of the total outstanding capital through quotas that, in many cases, can be modulated according to the situation of the interested party. Once sold the part of the loan that corresponds to the old house is canceled and the traditional mortgage for the new one is formalized, that begins to be paid with normality.

In short, the bank anticipates the money necessary for the acquisition and agrees to wait a certain time until the client sells his house.

How long does it take to sell the house?

These products usually have a grace period ranging from 6 months to 5 years (depending on the entity) in which the only payment that the mortgaged have to pay is that of the expenses derived from the loan, that is, That only interest on the loan is paid . Therefore, the time indicated to sell the house will be the one that is fixed as lack, since in the case of not having disposed of the property at the end of that period the client will have to face the payment of the common shares of the mortgage, Which will be higher than the one you had at the beginning to be the much borrowed amount. However, it must be taken into account that some entities do not have this lack.

How is the mortgage payment guaranteed?

The guarantee that the bank obtains that the loan will be paid is double with a bridge mortgage, since although the total increases and therefore the risk of default is higher, the guarantee against insolvency is in the 2 properties of which the client has.

What happens if the first home is not sold?

As we say, bridge mortgages are hired to acquire a second home while trying to sell the first, but what if this is not achieved? In the event that the grace period expires, in which only the expenses of the mortgage are paid and the house is not sold, the client must begin to pay the amount that the bank financed from the beginning. That is, after that period of time you have to start paying the normal mortgage payments even if the property has not been sold.

Advantages and disadvantages

The advantage of getting a bridge mortgage rather than 2 different mortgages is that you do not need to sell the home in a hurry. In addition, the fee for the loan is not as high as if they had 2, since you can pay less while the first is sold and then the mortgage is adjusted to the capital pending payment of the second.

The other side of the coin is the drawbacks, and because it is an operation that carries more risk for the entity, to grant these home exchange loans usually require a client profile with greater solvency than for a traditional one.

A home change loan

As an example, if the second mortgage is for a dwelling on a flat, the bridge loan will take into account the amount that adds the entry required for its purchase and the necessary payments in addition to the outstanding amount of the previous one. However, in the case of an already built house, the mortgage will be set up according to the sum of the outstanding amount of the house for sale and 100% of the cost of the purchase (unless the client has money in Effective to decrease it).

Buy the home you need

When buying a home you have to think carefully about the requirements you must meet: number of rooms, parking space, lift, bathrooms, kitchen size, and the area where you are … But once you find the perfect house it is time to pay. Analyze the commissions, clauses, requirements and get with your ideal home.

Mortgage for second home

The requirements to obtain a mortgage for a second home are stricter than to obtain one destined to finance the first residence.

The mortgage for second home usually finances between 60 and 70% of its value.

The bank assumes greater risk by granting mortgages intended for the purchase of an unusual home.

However, having a second home in property is not cheap, but rather a high expense. In fact, according to a recent analysis by the Organization of Consumers and Users (OCU), maintaining a second home on the Spanish coast costs on average 1,791 dollars per year.

In addition to the maintenance costs, a second residence means, in the vast majority of cases, ask the bank for a second mortgage to finance its purchase. These mortgages usually have fairly strict requirements and conditions, something is due in large part to be a property not intended for the habitual residence.

Increased risk, tighter requirements

It is not new that for an entity to grant a mortgage is necessary to meet a number of requirements and meet conditions that, in many cases, are not available to everyone. These requirements are much more stringent if the home to be acquired is not intended to be the primary home of the mortgaged or his family, but their purposes are vacation or second home. This is due in the first place to the fact that the client is at greater risk of not paying because it is not a necessity for him because it is not his main home. Therefore, if necessary, you will not pay the mortgage on your house on the beach before your usual home, for example. On the other hand.

Less funded amount

The first thing to consider before buying a second home is that the financing provided by the bank will be lower than the one you would give in the case of a main house. At present, the financing that most entities provide in the case of the first dwelling corresponds to 80% of the appraisal value of the dwelling. In the case of the second, the most common is that financing is between 60 and 70% of the value of housing.

Major savings

That the bank lends less money to the client means that the client must have more money saved to be able to contract the mortgage. In the case of the second home, it is imperative that the prospective buyer has sufficient savings to assume between 30 and 40% of the value of the home, which will be the amount that will have to be paid to the bank as an “entrance”.

High and stable income

Just as institutions often require greater savings to acquire a second home, the client must also have stable and high income so that the bank can agree to lend the money. If in the case of the first dwelling, the monthly income is around 2,000 dollars, for the second this amount will have to be around 500 or 1,000 dollars higher. On the other hand, the borrowing entity will also require the client to provide guarantees such as having an indefinite job in which it can demonstrate some stability and seniority. In addition, other essential requirements are to keep abreast of payments and invoices, not having a very high level of indebtedness or not appear in any file of defaulters, as happens when any mortgage is requested.

Finding the best mortgage

In addition to imposing high requirements, banks often guard their backs against a major risk with high interest rates on their mortgages, whether at fixed, variable, or mixed rates. That is why to find the most suitable for each person is necessary to compare different products and entities.

Mortgage requirements, things to keep in mind

When embarking on the purchase of a home, do we know everything involved in making such a decision? Can we meet with surprises and expenses that we did not expect? Before making such an important decision it is best to be informed and take into account all those expenses associated to be able to calculate a real budget. Among these additional expenses are elements we often hear heard of as commissions, related products, insurance, interest rate or floor clause? But do we really know what they are?

Expenses and taxes

The first thing to think about is that banks grant up to 80% of the appraised value of the property that we want to acquire. The rest we have to pay as initial payment, to which we must add the expenses derived from the processing of the mortgage and the purchase of the house (commissions, taxes, etc.). Between notary expenses, taxes, and other efforts we can pay up to 10% more.

In addition, it is important to know that there are a series of procedures that must be paid when applying for a mortgage regardless of whether or not we are granted. For example, the appraisal is mandatory, which has a validity of 6 months. It is also necessary to ask for verification of ownership of the property and if it is free of charges such as unpaid taxes.

The 5 things to keep in mind before you apply for a mortgage The 5 things to keep in mind before you apply for a mortgage

The purchase of a home also generates taxes, and these vary greatly depending on factors. For example, what is paid for a new home is not the same as for a second-hand home. VAT is only paid when it is new and purchased directly from the developer (10% or 4% if it is an Official Protection Housing or VPO). If it is a used home then we will have to pay the Transfer Tax. It assumes between 5 and 8% of the price, depending on the autonomous community, if you are a large family, you can prove a handicap or if you are under 32, among other factors.

To complete the purchase must be signed before a notary and register both the mortgage and the deed of the house in the Registry. After that, it is mandatory to pay the Tax of Documented Legal Acts, which is between 0.1 and 1.5% of the total mortgage liability (that is, the sum of the total loan, plus expenses, interest, etc.) depending Of the conditions and the autonomous community. These procedures are usually entrusted to a manager. If we are interested in a VPO we are in luck, since they have a reduced price for this type of expenses.

Finally, we will usually have to pay the manager, who is responsible for the registration of the property and the tax settlement. This expense depends on the manager himself, so it is convenient to ask and compare different options. Generally, these services cost between $150 and 300.

Now that we have located the expenses that can appear and thus avoid surprises, we will inquire about different concepts of the product itself.

Energy certification

It is a document that makes it possible to assess and compare the energy efficiency of housing as an added factor for purchasing and / or rental decisions. In this certificate is specified by means of a scale that goes from A to G, the emission level of C0 2 in comparison with the dimensions of the building. From 2013, the homes for sale or rent in Spain must have this certificate.

There are special cases, such as the Triodes Mortgage, in which the interest rate is guided by the Euribor, but the percentage added (differential) is linked to the energy certification of the home. The more energy-efficient the property, the better conditions are obtained. The improvement of energy efficiency also entails great economic savings in domestic economies: the difference in expenditure on heating, cooling and hot water between a dwelling of about 100 m² of energy category A and another category G can be up to $2011.63 a year. Among the improvement recommendations to increase the energy efficiency of the building are measures as simple as improving the sealing of windows or installing awnings.

Related products

Normally when we ask for a mortgage we will have to contract different additional products. These products are usually the contracting of life or multi-risk insurance, credit cards or domicile payroll in the bank, among others. In this sense, we must assess the cost of each of these products that we are offered and that can sometimes make a mortgage that seems to have the best conditions a priori and we end up getting more expensive.

In short, when buying a home we not only have to take into account the amount of the loan and the installments to pay. It is very important to take into account all the other associated expenses that we are going to find ourselves and also to remember the energy certification and its implication in the care of the environment and also in the economic saving that can mean. Making a budget with all these data and including possible contingencies can help us a lot.

Other types of mortgages

After analyzing the major types of mortgage loans according to the appraisal and the duration and the classification according to the interest rate, we will take a look at other types of mortgages that can also be found in the market. These other variants are used to cover special situations in which it is necessary to apply specific conditions to adapt to certain characteristics.

Mortgage multi-currency

This is a variant of variable rate mortgage loans. In this case one or more foreign currencies are used as reference index. Normally, stable currencies are chosen with low rates that allow savings relative to the national currency. The problem is that if the currency or currencies we have chosen as a reference undergo a revaluation, we may be more expensive, but not the usual.

Flexible mortgage

Its use has spread over the last few years, due to the increasing problems of the users to be able to face the payments. These credits are adapted to the needs, with mixed interest rates, possibility of grace periods, extensions and other advantages.

Mortgage refinanced or surrogate

Subrogation occurs when the loan is exchanged with another financial institution, usually to obtain better terms.

Mortgage bridge

Its official name is bridge credit, and it is a temporary loan for housing change. The property is used as collateral in order to obtain a loan with which to pay the entrance of the new house and some expenses more. Meanwhile, there is a time to sell the old house. Once sold a new normal mortgage is contracted with which the bridge credit is canceled.

Qualified mortgages

It is a type of special mortgage loan intended for the payment of official housing. Its conditions are much more advantageous than normal, with lower interests, no commissions and fixed fees. The characteristics of these credits are agreed between the Ministry of Housing and financial institutions.

What should I know before hiring a mortgage?

Before applying for a mortgage loan it is necessary:

Deciding how much to ask. In addition to the price of purchase, expenditure mentioned in the box above and expenses of the mortgage loan, such as pricing, the origination fee (if any), the agency, taxes, etc. must be taken into account It is recommended that the monthly payments do not exceed 35% of the income of those applying for the loan, it must be taken into account that income may change over the years and that quotas of variable loans may rise.

Compare offers from different financial institutions studying the generic information of its prospectus (Precontractual Information Sheets), which are delivered free of charge to anyone who requests it. It is important to look at the APR, which is the annual interest rate actually paid in a year, and includes the fees charged by the financial institution and payment deadlines.

Analyze Personalized Information Sheet. Once you have chosen the bank, and before committing to it, this will give no charge Personalized Information Sheet on the financial conditions of the loan offer will be detailed.

Request a binding offer. Requested the loan and made ​​the appraisal, you should ask the financial institution a binding offer with all financial terms of the contract. The binding offer will be valid no less than fourteen calendar days from date of delivery. If while Personalized Information Sheet and agree its content is made, both can be delivered in a single document.

Writing mortgage loan

Accepted the binding offer, the financial institution shall forward the documents to the notary chosen by the buyer to prepare the deed and mortgage loan deed. Remember that the buyer has the right to choose the notary.

It is important to remember that the buyer has the notary three working days before the signing of the deeds to examine them thoroughly with notary’s advice and seek clarification and changes to the financial institution if necessary.

Loan delivery usually occurs simultaneously with the signing of the deed of sale.

After the signing, the notary sends the registration of the property an authentic electronic authorized copy of the deeds of sale and the mortgage loan.

When the loan is paid off, it would be one last step: the deed of cancellation of the mortgage. The sign only the representatives of the financial institution at the request of the debtor, who have the right to choose the notary who authorizes and to advise on the costs, which are borne by their own. Once signed, he enrolled in the Registry of Property.

Interests and clauses

Interest:  This is the price paid for the loan. It is the result of applying a percentage to the money owed ​​at all times. The interest rate can be fixed or variable. If something little usual fixed is usually higher than variable. The advantage is that you always know what you pay because it will not affect possible declines or increases in reference rates during the term of the loan.

However, most people prefer a variable interest at a rate (which is usually the Euribor) to which a differential, which is the minimum interest rate applicable to the loan if the rate agreed reference down to is added zero.

Clauses:  As important as the reference rate and the differential are the clauses that some entities include in their contracts, which limit the variation in the interest rate applicable to the loan. These clauses indicate a maximum (ceiling) and a minimum (floor). It is in the so – called “floor “where you have to pay special attention because when it is reached, the interest rate drops reference not translated into a reduction in quotas.

The notary:

  • It will check whether limits have been established to changes in the interest rate, collect that circumstance in writing, and explain expressly and detailed its effects.
  • It will inform you of any relevant increase arising in their quotas, and the effects of grace periods, if any, in the amount thereof.
  • You will see that non-financial clauses in writing does not involve fees or expenses that should be on the financial clauses.

Unfair terms:  Only judges can declare an unfair term. When you have done so, the judgment is final, and is registered in the Register of General Contract Conditions, notaries must remove them from public documents. To help in this task, the General Council of Notaries has created the Body Control unfair terms (OCCA). In this way the legal certainty increases in hiring and helps prevent legal challenges.

What indices you can reference your mortgage

The Euribor is the reference rate most used in constituting mortgages to variable interest, specifically in 88.9% of new contracts. These are the latest data provided by the National Statistics Institute (INE), in which it is revealed that the European benchmark is the favorite among Spanish users to formalize their mortgages. With respect to the change in interest rate conditions, it is also the one most linked to variable rate mortgages, both before the change (71.5%) and after (82.2%).

But this trend in the reference models may change during the year before the possibility it looks replaced by the Euribor Plus. Although not be implemented immediately, but must wait, predictably, a few months before landing in the domestic housing market. And all as a result of the decision of the European Commission to introduce a new benchmark to provide greater transparency to the operations carried out by users.

And there is no doubt, as they still remain many uncertainties about its implementation, if it will be cheaper for their users, what will happen to those who have contracted other reference, and of course, the exact date that definitely hit the interbank market. Not surprisingly, one of the reasons given by the Community authorities is to avoid unpleasant cases where rates were manipulated by some banks and negatively affecting much of consumers.

Your expenses will be formed by adding the differential bank

You must know that you have more options to link this operation to other benchmarks. Believe it or not there is life beyond the Euribor, and all of them are official and published by the Bank selected without any restriction if you think you will improve the conditions of the contract. But that if they are clearly minority as is clear from the latest official data as a whole do not represent more than 7% of the transactions executed in late 2014.

Do not forget that variable rate mortgages are revised based on these benchmarks, which are what ultimately determine the price of the mortgage. Although this assessment will not have to pay the customer, but will be established by adding the differential to apply the bank. And this is precisely the part of the operation where you can save more money in monthly installments, to collect the latest offers that are developing credit institutions, which offer the best proposals to 1.50%.

What kind of references you can link the mortgage?

Although, as already noted, the Euribor is still the kind of majority reference between individuals who choose to hire a credit for the purchase of your home, the fact remains that there are other visible references in the market, although few operations they intersect in contracts. All are official and regulated, although depending on the election expensive or can reduce the cost of your mortgage.

Are mainly the MIBOR (Madrid Interbank Offered Rate), an interbank rate applied in the capital market of Madrid and is only officer for operations contracted before 2000, and to some extent has been replaced by Euribor, with which keeps a very similar evolution in the interest applies. With the advent of the new century, its operations have virtually disappeared and only previously contracted loans are still linked to this reference.

Another linkage that support markets comes from the IRS (Interest Rate Swap), an alternative index you can also link the mortgage. Although -and keeping some similarity to the Euribor Plus- in this case reflects the evolution of interest rates to five years. To do this, it calculates the average of the futures market on the deadline. It reflects a more transparent interest rates that apply on your mortgage. This is its main contribution with respect to other contracts, but are also very few transactions formalized with this index.

And finally, another type of reference that you can access to finance your home is the IRPH entities (Benchmark Mortgage Loan), which is used by almost 8% of mortgages contracted in the Spanish state. Configured as the strongest European benchmark index above the previous models alternative. However, it is more expensive and generates greater problems in its execution to be based on a monthly average for all credit institutions.

What are the accounting entries for foreclosure?

A foreclosure is a business transaction by which a bank becomes a property owner after being the holder of the mortgage on the property. All business transactions are recorded accordingly in the accounting books, and a foreclosure requires certain seats accounting to reflect the change in ownership of assets of a bank from lending to the property. A foreclosure also involves other accounting entries to account for any deterioration in foreclosure, while a bank has assets of execution and sale of goods executed last.

Acquisition

When a bank forecloses on a property that is the guarantee of your loan, effectively acquires awarded good and frees the borrower from the obligation to pay for the cancellation of the loan in default. In general, the accounts would record a charge to property foreclosed and a credit to the outstanding loan.

If the fair market value of foreclosed assets is higher or lower than the amount of outstanding loans at the time of foreclosure, the foreclosure generates a gain or loss recorded as a credit or debit card, respectively. Otherwise, the foreclosure fully satisfies the loan without any gain or loss.

Disability

In a well could have been awarded impaired during his arrest and should be re-evaluated in any decrease in the value of the foreclosed fair market over time. An impairment charge is the loss that goes to the income statement. The accounts debited loss on impairment and credit related foreclosed. The fair value of an asset awarded later can also increase, and therefore, a gain must register as a credit. However, the basis of a foreclosed property should never exceed the base acquisition.

Provision

The provision refers foreclosure sale of a foreclosed property. After the sale, the bank that owns the foreclosed property removed from its balance sheet and record the proceeds from the sale as well as gains and losses. Entries shall be debited cash and credit any losses and foreclosed property and any related gain. However, to be considered as a sale, the buyer’s investment must be adequate to demonstrate a commitment to pay for the property.

Financing

The sale of goods awarded may also involve seller financing in which the buyer provides only a certain amount of down payment at the time of the transaction. With seller financing, a bank sells foreclosed property would record a charge to loan receivable as an asset on its balance sheet. Any initial payment is also due, but gains or losses cannot be fully recognized at the time of sale. The bank will only recognize a gain or partial loss in proportion to the money received so far and records the balance of the gain or loss is deferred as.

What about your second mortgage foreclosure

A first foreclosure is simple and there are few surprises, if no other mortgage liens against the property. When another creditor is added, that makes the foreclosure process more complicated. There are many things that can happen with a second mortgage in foreclosure, depending on the borrower’s circumstances.

Background: lien position

When a property has mortgage encumbrances placed upon each charge has a certain position, depending on the order in which mortgages are presented. For example, the mortgage is filed first in first position. The next creditor is in second position, and commonly called second mortgage. If the first mortgage is paid off, the second mortgage is moved to the first position and a third mortgage, if any, moves to the second. The position indicates the order in which mortgages are paid when you sell the house.

Running first mortgage

If you are behind on payments of the first mortgage company, eventually will start foreclosure. As the foreclosure process near the end, the property is sold. When the first mortgage holder sells the property receives the proceeds of the sale, leaving any excess of the balance due of the first hands of the second mortgagee. Once all mortgages have been paid for selling any product that has been going to the borrower, but that is rare. If the property is worth less than the value of the first mortgage, Second Mortgage Company receives nothing.

Running second mortgage

The holder of the second mortgage can foreclose on a house as the holder of the first mortgage. If there is enough capital, both the first and the second mortgage is paid. Even if it is not enough to pay off the second mortgage, many holders of the second mortgage can still foreclose because they can get some money in the sale.

If the value of the property is less than the balance of the first mortgage, there is no reason that the holder of the second mortgage foreclosure do. It would receive nothing and, in this case, the holder of the second mortgage is essentially no collateral.

Chapter 13 Bankruptcy

If your home is in foreclosure, and want to try to keep, you can use Chapter 13 bankruptcy. Chapter 13 stops the activity proceeds immediately, stopping the foreclosure until you can reach a payment agreement with the mortgage company. If you have a second mortgage that is fully guaranteed by the value of the house will have to pay the mortgage as well, although part of the payment can be modified in bankruptcy. If your second mortgage is partially guaranteed, the bankruptcy judge may reduce the second mortgage balance to the amount that is guaranteed by the house. If the house is on the level, and even the first mortgage is not fully guaranteed, the bankruptcy judge may completely eliminate the second lien.

The best ways to pay off a mortgage faster

Pay your mortgage as quickly as possible can save you thousands of dollars of interest. Besides that, pay your mortgage relieves a lot of stress without the big bill taking you each month. But paying your mortgage in advance needs careful planning so you can do wisely and more efficient ways to cost.

Biweekly payments

Many homeowners are choosing to pay your mortgage bi – weekly payments instead of the standard monthly payments. Even if you’re almost paying the same amount each month, the difference is that you are saving on interest of the increase. Besides that, pay every two weeks means you’re paying the equivalent of 13 payments each year (52 weeks) instead of the standard 12 payments you would be doing if you paid every month. Based on a 30 year mortgage of $ 100,000 with an interest rate of 7%, you can save almost $ 35,000 over the course of the mortgage and pay your house six years ago compared to monthly payments.

Use bonus money

Before making any payment of large sums on your mortgage, make sure your contract allows. Some may prohibit large payments or may have financial penalties for them. However, if allowed to do large payments regularly, use your bonus money or any other large amount of money you get periodically to apply to your mortgage. Christmas bonuses, tax refunds and birthday money from your grandmother can help you pay your mortgage several years earlier than you planned.

Make larger payments

Your financial situation usually improves in the course of a mortgage. Most people get in your business, get promotions or just get better jobs over the years. When this happens, discuss the possibility of increasing your payments with your mortgage lender. Even increase them for $ 50 or $ 100 each time you can afford will your mortgage sooner than you had thought.

Refinance at a lower interest rate

Refinancing is an ideal way to pay your mortgage faster way. If you have better credit than you had when financier first home, you are probably eligible for an interest rate lower. This means a lower total on the mortgage. However, when you do this, consider a shorter term for your mortgage. For example, if you have a 30 year mortgage now considered one of 15 or 20 years. Your payments are likely to be slightly higher, but you will save thousands of interest in the years ahead and pay your mortgage much faster than with a 30-year plan.