How to Manage Your Mortgage

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How to Manage Your Mortgage

Mortgages are a commitment that expects us to plan further out in life than many people are used to. Whether you’re staring down 30 years or 10: it can be overwhelming and confusing. Many don’t know how to handle their mortgage besides payments and aren’t sure what living with a mortgage means.

Here’s how to handle your house payments and ensure that you can afford them for years to come.

Pay on Time, More Than Minimum

There’s not enough that can be said about paying off your mortgage on time. These payments can increase your credit score, give you the chance to keep a close eye on your finances and help keep your interest rates down.

Paying higher than the minimum is encouraged but not always necessary. When looking at a house payment calculator, consider how much above you can pay to finish your mortgage sooner. 

Don’t Borrow Against It for Things You Don’t Need

Many think that borrowing against a mortgage is great since they already know the lender, and it’s more straightforward.  Unfortunately, this money is often spent on things like snazzy vehicles they don’t need.

Don’t borrow against your mortgage unless it’s for something vital to your life, like medical bills or education.  On top of this, only borrow if you know you’re going to be able to pay it off.  Don’t gamble your home on a chance.

Set Aside Money Every Month

Saving money is vital to surviving.  The old rule of thumb says to save ten percent of what you make, but that rule was made when everyone was also paying into 401ks.  Unfortunately, most people don’t have this type of program to settle into.  For those homeowners, they must save double that.  Twenty percent ensures you can pour money into your savings to help you on a rainy day and possibly give you the chance to start your retirement fund.  These savings will also give you a safety net in case there’s a month or two that you can’t pay your house payment.

Pay Attention To Your Bills

Autopay is a fantastic invention that lets us handle our bills without thinking about them every day.  Instead, our accounts automatically slip the money away, and our payments are guaranteed on time.

Unfortunately, this could leave you losing more money than you need to pay.

Pay close attention to your energy, insurance, and house payments to ensure there aren’t any changes.  If you notice anything, you must take it to your lender as soon as possible.

Refinance if Necessary

Sometimes the markets shift after you buy a home.  A couple of years down the road, you realize interest rates are lower, your credit score is better, and it feels like a good time to refinance.  This process isn’t simple, there’s a lot of time and paperwork into making this work for you, but when it happens, you have the chance at something great.

Don’t refinance without doing any research.  Please pay attention to market trends, or ask a professional who works in the field for an opinion.

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