8/30/2017 0 Comments How to Pay Off Your Mortgage EarlyThe American real estate sector has picked pace, and it’s not just the inexperienced first time home buyers who are investing in real estate, but many experienced investors too are positive about it being a good time to invest in the real estate sector. Another good news is that the home loan rates are also comparatively lower. However, what about those who obtained a home loan at higher rates and are still paying off their loans at those rates. To help, in this post we list a few ways to pay off a mortgage early. Let’s take a look. 1. Make lump-sum payments If you have received a lump-sum amount, whether through a company bonus, hefty inheritance or a tax refund, it’s advisable to use it to repay your existing debts. This will help you repay a part of your outstanding principal balance, which in turn will let you save on the interest you pay, or allow you to get rid of your mortgage early. 2. Pay additional amounts each month Some lenders may allow you to pay a variable additional amount towards the repayment of your outstanding loan. No matter how small the amount, always try to pay an additional amount in addition to your existing monthly installment due. While it may seem little to you right now, this can help you reduce your loan term by a few years. To get the exact number of years by which the loan term would get reduced, use a monthly mortgage payment estimator. 3. Refinance to get a lower interest rate If you have obtained a fixed-rate mortgage, you must always keep an eye on the prevailing interest rates. In case you notice a substantial interest rate drop, refinance your existing home loan to take advantage of the situation. Some of the popular home loans options in Texas are VA loan refinance, USDA refinance and FHA refinance. 4. Switch to a shorter loan term Did you know that you can request for a change in loan term? For example, if you had a 30 year loan term, you can ask the lender to reduce the loan term to say 15 years or 20 years. Many homebuyers who cannot afford to pay a high monthly installment initially, switch to a shorter term home loan with an increased monthly installment, as their earnings increase over the years. Hire a Home Loan Consultant Refinancing an existing home loan may seem a bit complicated. If you have an existing loan, be it a VA home loan in Texas, or a USDA home loan, and you need help to pay it off early, hire a home loan consultant who can guide you through the process of refinancing your existing home loan.
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The amount of down payment required for a conventional home loan may vary anywhere between 5 to 20 percent. As the amount of down payment is high, homebuyers with insufficient funds, often have to procrastinate their home-buying decision to a later date, despite their being eligible for a home loan. If you too are planning to take a home loan but do not have sufficient funds to pay for the down payment, in this post we list three Texas home loan programs, that require zero or minimal down payment. Let’s take a look. USDA Loans USDA home loans are one of the most sought after home loans in the US. They come with significant benefits allowing homebuyers to buy a property in the rural and suburban areas. Borrowers who qualify for a USDA loan need not pay any down payment. In addition to this, the borrowers may also have the closing costs rolled into their loan. VA Loans Backed by the U.S. Department of Veterans Affairs, the VA loans are one of the most popular home loans among veteran homebuyers. The VA loans not only have interest rates that are much less than what conventional loans offer, but they also allow borrowers to finance 100 percent of the property value. While there is a funding fee linked to obtaining a VA home loan, even this fee can be rolled into the original loan, thereby allowing borrowers to pay almost nothing. FHA Loans Insured by the U.S. Federal Housing Administration, the FHA loans are another low down-payment home loan option for home loan borrowers. If you don’t have a great credit score, you can still get an FHA loan, that too at a minimum down payment of 3.5 percent. In addition to the down-payment amount, FHA loan borrowers are also required to pay an upfront premium of 1.75 percent, that can be rolled into the loan. Conclusion If you are planning to buy a home and are worried about the down payment, then this post should have helped. If you still need more help, get in touch with a home loan consultant who can help you weigh the pros and cons of different home loan programs, allowing you to choose a loan that best suits your requirement. |
AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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