For most people, purchasing a home is one of the biggest investments they will ever make. Buying a house or apartment usually involves a lot of money, especially if it is mortgaged. The key to saving money on your mortgage lies in getting the best available one for yourself. Although that may sound like an obvious solution, essentially it is about utilizing available avenues that will help you save quite a lot of money, especially if you make your monthly payments on time. While everyone wants to pay off their mortgage as soon as possible, it requires considerable amount of planning to transform wishes into reality.
There are several methods to help you save money on your mortgage:
Seller financing: This allows you to pay the amount directly to the seller over a period of time, rather than borrowing money and paying all of it at once. It enables you to negotiate a better rate of interest, and avoid the numerous administrative fees charged by lending institutions. Moreover, it saves you from the frightful mortgage insurance. It also provides you with a secure source of income and returns, without having to pay capital gains tax. The seller holds the house as a collateral that can be taken back, if the buyer defaults.
Debt Consolidation: When you reimburse your mortgage, you often pay off a number of unsecured debts such as credit cards, charge cards, personal loans and the like. The rates of interest on home loans are relatively lower than those on unsecured debts. Therefore, debt consolidation would help you to bring down your monthly payments. In other words, you would be paying an interest rate that applies to home loans on all your unsecured debts.