A home mortgage is not something you acquire and then forget about it, except for making payments. There are, however, ways that every homeowner can manage their mortgage for better short-term and long-term results. We have put together 5 tips to manage your mortgage. These are tips that have been proven to be important for every homeowner with a mortgage.
1. Pay The Payment On Time
Take every precaution to ensure that you make every mortgage payment on time. People can forget to make a payment when they are caught up in the challenges of everyday living, but forgetting a payment can ruin your credit for seven years. A late payment might result in accrued interest and penalties. You can avoid this by having the payment automatically deducted from your checking or savings account.
2. Consider Other Expenses You Will Have To Make When You Buy A Home
Buyers often have to scrape up every dollar they can find just to make the down payment and pay for the closing costs. Often, buyers will then go into debt to buy items for their new home. Buyers may also take out a personal loan to make these purchases. Problems arise when the interest accumulates and the payments are more than can be paid on time. A condition like this can interfere with making mortgage payments on time. Living on the edge is dangerous for managing a mortgage.
3. Create A Rainy Day Fund
Homeowners need a rainy day fund to cover unexpected expenses such as a leaking roof, a burst water heater, or leaking water pipes. Doing so will keep your mortgage payment funds untouched.
4. Keep A Watchful Eye On Your Property Taxes An Home Insurance
These are two automatic inclusions in your mortgage payment, and these can go up which means that your mortgage payment will go up by a corresponding amount. Many taxing authorities and insurance companies do not tell you when their rate are increasing. For some homeowners, this can be a significant problem. Property insurance premiums have been increasing by 10 to 20 percent annually. Call your insurance company before the renewal date and ask if your policy premium will increase. If it will, then look for another insurance company. If your property taxes are scheduled to increase, then you might want to appeal the increase. Check the tax rates for the property around you to see if rates are increasing for those owners. If they are not, then you have a right to challenge your increase. Keep in mind that many municipalities increase property taxes every year.
5. Try To pay Down Your Mortgage Quickly
One easy way to accomplish this is to pay your mortgage payment by paying one-half every two weeks. This will result in making one extra payment every year, and the savings in the long-run will be significant. Or, pay a monthly amount that is equivalent to what your principle and interest payment would be for a 15-year mortgage.