Managing Your Mortgage Loan Wisely

Managing Your Mortgage Loan Wisely


Home buyers who qualify for a mortgage understand the commitment that they are making. Amount borrowed, interest rate, escrow, loan term, and monthly mortgage payments are spelled out to give the borrower the information they need to manage their loan. However, the present credit crunch is impacting some consumers as rising interest rates has sent adjustable loan rates skyward. Borderline borrowers, who could afford to make previous monthly payment amounts can no longer do so and have fallen behind with their loans. With tens of thousands of homeowners facing foreclosure, this news is reverberating throughout the housing market.

The News Isn’t Bleak For Everyone

Fortunately, not every homeowner is in distress with some eager to find ways to pay down their mortgage in a bid to save on interest and to own their home free and clear. Paying down a mortgage obligation isn’t difficult to do and it can be done so as to shave as much as one-third of the time off of the loan term. If you are interested in paying off your mortgage loan early, then please read on for some tips to help you succeed.

Ways To Pay Down Your Mortgage Loan

Mortgage MoneyBefore you step up payments, make sure that your lender will accept early payments without penalty. Some of the options I’m about to share with you may not be allowable according to your loan agreement, therefore it is important for you to learn if any restrictions are in place before implementing a new payment plan.

Make One Extra Payment Annually — Instead of making twelve payments per year, consider adding a thirteenth payment. If you send in an extra payment, make sure that the mortgage lender subtracts that amount from your principle. One extra payment made annually can take 5 to 7 years off of a 30-year loan. Alternatively, setting up an automatic draft where you can pay an extra $25 or $50 per month will pay down your loan faster too.

Make Bi-Weekly Payments — If your mortgage is $1000 per month, you can save on interest payments by paying $500 bi-weekly. Although the payments appear to be the same, you’ll actually be making 26 half payments annually which is equivalent to 13 full monthly payments. This method reduces interest accumulation too and pays off a 30-year mortgage in just over 23 years.

Refinance For A Better Deal — Despite rising mortgage rates, you may be able to refinance your loan for a lower rate. If your financial picture is good, you can ask for a shorter term loan which may result in a higher monthly payment. You’ll save thousands of dollars in interest while shortening your loan obligation by several years. Look for a lender who offers a low rate and who picks up your closing costs which will keep your expenses down.

Wise planning can save you money and offer you a cushion should you eventually face tough times financially. Knowing your home’s market value, understanding your current mortgage obligation, and coming up with a strategy to pay down your mortgage faster can save you tens of thousands of dollars in interest payments and keep you ahead of the game.


end of post idea


Helpful article? Leave us a quick comment below.
And please give this article a rating and/or share it within your social networks.

facebook linkedin pinterest

Amazon Affiliate Disclosure: is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to The commission earnings are used to defray our cost of operation.

View our FTC Disclosure for other affiliate information.

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".