Tag Archives: home ownership

Wait, what!  Save money on a loan?  That’s right.  I bet you didn’t know that you could save money on the loans you have.  Sure, one simple answer is to look for the lowest interest rate. But in the days of the internet, it has become harder for lenders to charge more than the market rate for the privilege of using their money. 

Take, for example, your average mortgage.  Let’s say it is for $200,000 and is on a 30-year fixed rate loan of 6 percent. Based on that the monthly payment is $1,199 or a total payment of $431,640 over the life of the loan.   You got it right, the bank will charge you more than double what your original loan was for if you keep the loan for the entire 30-years. 

OK, enough with the depressing news, let’s see how you can save some money.

Extra Payments

Now you know how much your loan costs why would you be content with making the minimum payment every month.  Instead, you want to put together a plan to make at least one extra payment per year.

These payments will automatically be applied to the principal balance on your loan and this will help you to not only pay down the loan by eliminate some of the interest payable.  If you think this sounds too good to be true then check out the math for yourself. 

Based on the payment schedule mentioned earlier one additional payment per year will help you to save more than $45,000 and will cut nearly five years off the life of the loan – talk about saving.

Bi-Weekly Payments

You might have assumed that you can only make monthly payments on your loan but this isn’t the case.  Besides making extra payments another option is to ask your bank to put you on a bi-weekly payment schedule

Doing so will cut the total payment amount in half and this will make it easier to manage from a cash flow perspective.  In addition, you are reducing to total amount of time which the interest can compound and this will result in additional savings.

Shop Around for Mortgage Insurance

This is something else that most people don’t know but you can shop around for mortgage insurance.  In this way, you can find a policy which might be as much as 20 percent less than what you are paying now. 

However, you don’t want to take those savings and run to the casino, instead use the money to accelerate the payments on your mortgage.  Even if you only save $100 per month that is the cost of another additional mortgage payment every year and if you can do this AND make the additional payment as mentioned above, then you can save close to $94,000 and reduce the life of your mortgage by 10 years.

Property Taxes

This is something else which most people take at face value but in most places, you can ask to have your home reassessed, especially if the property values in your community went down over the last year. 

By doing so you can lower the cost of your property taxes in absolute terms and this will give you extra money to put towards your mortgage.

Hit the Reset Button

Ok, many lenders won’t be willing to do this but in some cases, you can ask to have your mortgage reset, especially if you regularly make large payments. 

This will recalculate the payment over the remaining time that is left on the loan and this could result in further savings.

Hit the Pause Button

While the other tips were geared for borrowers of all ages, this one is for older borrowers who can use the equity in your home to pay off their existing mortgage and then take the money they saved to invest for their retirement.

This is called a reverse mortgage and has become a more popular option in recent years.  If you want to learn more about reverse mortgages, then check out this state by state listing of vendors.

There you have it, six ways to save money on your loan.  Check them out for yourself as the money saved will help you to achieve financial freedom.


credit scoreOur credit score determines a lot of things we are able to do with in our financial lives.

Without a good credit score, we might have problems getting credit cards, get a decent deal on our auto loan and so on.

A good credit score enables us to get a decent mortgage so we can buy a house for ourselves and our families.

But, what if our credit score simply is not good enough to get a deal that is acceptable for our current financial situation?

Credit scores can mean the difference between a mortgage and down payment that we pay with ease, and one we’re going to struggle with.

Financial decisions are the cornerstone of our modern lives. Not handling our finances, the proper way, may cause our credit score (and thus our credit worthiness) to crumble.

This is a vicious circle and we should avoid bad financial decisions not only when considering to buy a house, but every time we use our credit card.

Because this is a very important topic for many of us, we want to break the whole credit score thing down to some basic elements in order to give you a glimpse at what it means to have a “good enough” credit score to buy a house.

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remodel-641708_640Making big changes to your home can be expensive. Whether you are looking at an upgrade like a bathroom remodel or you need to repair your plumbing or roof, you are looking at spending a few thousand dollars at a minimum in most cases. Chances are good that you don't have a few thousand dollars just sitting around in your bank account, and if you do, it's probably earmarked for something else. Few of us just have the money at the ready when home repairs and upgrades come calling.

Thinking ahead can help you to have a plan in place for the unexpected. No matter the timeline, a few smart strategies can help you get the money you need. Here are a few things you can do to finance your home upgrades and repairs:

Find the Best Deals and Values

The first place to start with any home repair or upgrade is to find the provider who is offering the best deal for the best quality product or service. You don't want to just focus on a low price. You could be sacrificing quality for that lower price, and you would end up spending a lot more on repairs and replacement in the future.

Instead, you want to focus on a price that is fair for the product or service you are getting. For example, if you are looking for the highest quality replacement windows New Orleans has to offer, GoBuildPro offers zero-percent financing and a lifetime guarantee. You'll get a fair price on windows without having to pay extra in financing, and you'll have the assurance of a long life span.

Build an Emergency Fund

Even with the best pricing, you may still not have enough if you haven't saved a bit of money. Not every provider offers financing, let alone financing with good terms. You need to have at least a small fund set aside in case of emergencies.

If you aren't good at saving, there are several things you can do to make it easier. Some people put aside their change after paying for something in cash. Others sign up for a program through their banks that automatically deducts a certain amount for a savings account or funnels reward payments into a savings account. Every little bit you can put aside helps. You'll be happy to have that money when disaster strikes.

Get a Home Equity Loan

If you have lived in your home for longer than a few years, you likely have a bit of equity built up that you can draw on for home repairs and upgrades. The longer you have lived in your home, the more equity you are likely to have. However, if the area where you live has seen a big real estate boom, your house may have shot up in value. The only way to know for sure is to get an appraisal.

The great benefit of a home equity loan is that once you're approved for it, it operates almost like a line of credit. You can draw on it as needed to fund repairs or upgrades, and you will pay a low interest rate in the process.

Stick to Your Maintenance

An ounce of prevention is worth a pound of cure, and that goes for home repairs also. If you are proactive and stick to your scheduled maintenance, you'll save a great deal of money down the road. It may be a pain to shell out $100 here and there for a chimney sweep or an HVAC inspection, but it's nothing compared to the thousands you may end up paying in repairs.

The money you save on repairs can also be put aside for savings for home upgrades. You can fund your dream kitchen or a new roof by just getting an annual roof inspection and other maintenance.

The high price of home repairs and upgrades can seem overwhelming, especially if you are living on a limited budget (the way most of us are). Yet these smart strategies can help you pay for just about any repair or upgrade that's needed. You just need to be a little proactive and be consistent.