Five Tips to Cut Mortgage Cost – When you work with the buyer’s agent such as Megan Dowdy, you are sure to get an excellent value for your purchased home. But still, you must put some thought and find out ways to repay the mortgage.
So how can you cut down the cost and repay the mortgage faster? – Five Tips to Cut Mortgage Cost
Here is the list of five great ways, suggested by Winter Garden realtors, to cut down the mortgage cost.
Let’s have a look!
1. Make Extra Repayments
While this may sound odd but it’s true! If you make extra repayments, you can get the benefit of low mortgage cost in the longer run. Since it’s all about paying the interest, as you make faster payments to repay the loan, it cuts down the interest, and you end up paying less cost against the mortgage. And this easy step can literally save you thousands of dollars.
2. Make a fast first repayment
More than often, lenders make you wait a whole month before you finally repay the first payment. While this may sound relieving, it adds cost to your mortgage. In simple words, as you delay the first repayment of principal, you eventually pay off more interest. Hence, try to make the first payment the same day of loan settlement. Even though the effect would be small, it does reduce your overall mortgage cost.
3. Split the mortgage
If you split the mortgage into two parts, the first part is paid on the basis of the standard variable rate set by the lender and second part is paid on the interest rate which is fixed.
Orlando Realtors suggest that to work around this, you can switch between the two parts as per your choice and this makes you pay the part which has somewhat lowest attached interest rate.
In the case of increase lender’s variable rate, you may switch to the fixed rate. And you end up paying the same principal amount every month but with a lower interest rate. If you manage the split mortgage wisely, you can save yourself thousands of dollars over the loan’s lifetime.
4. Get an offset account
The Winter Garden Realtors suggest that if a buyer is using a basic package of home loan, you might not have an access to an offset account. If yes, you must alter the situation because an offset account can be your ultimate key to reduce your interest payments significantly.
It works like this. Your lender actually links a separate account – offset account – with the mortgage account and whatever money you put into this account, it reduces the amount of principal. And when your principal amount is reduced, you pay less interest.
5. Pay a higher amount of deposit
The amount of deposit paid to buy a property can produce a drastic impact on the repayments throughout the mortgage loan’s repayment term. When you pay more deposit, it reduces your principal amount and since the interest paid on the remaining amount of principal, hence you end up repaying less interest. This is a great tip shared by most Winter Garden Realtors.
The above-shared tips are great to incorporate so use them wisely and save thousands of dollars easily. Visit Megan Dowdy Realty on Facebook.com and learn more about the Five Tips to Cut Mortgage Cost.
