How to Maximize Your Mortgage

How to Maximize Your Mortgage

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Making the most of your mortgage is a must for every homeowner.  A mortgage is a debt.  A lack of management, and it could feel like a life sentence.  Take control of your mortgage (or mortgage application) with these tips:


  1. Re finance your loan

If you have an existing mortgage, you may want to consider refinancing it. A 30-year loan is most likely attractive for the reasonable monthly payments.  In truth, you are actually paying a whole lot more. While your mortgage is outstanding, you will continue paying for interest.

As you pay off your loans, consider the PRINCIPAL AMOUNT, INTEREST, INSURANCE, and TAXES.  The insurance and tax will remain the same even if you decide to refinance.  The crucial factors to consider are the interest and principal amount.

A repayment plan of 15 or 20 years will give less time for the interest to accrue.  Banks offer lower rates on these types of repayment plans.  If you can afford to re-finance your loans, do so. It may seem like a larger amount per month. But the scheme allows you to save more in the long run.


  1. Make on time debt payments

Applying for a loan?

Pay on time.

A delinquency of 30, 60, or 90 days will significantly reduce your credit score.   Keep your credit score at its maximum as this will affect your mortgage approval.


  1. Make a huge down payment

Save. Save some more.  Save so that you are able to increase the amount of your downpayment. This drives your monthly payments down to a reasonable amount.


  1. Prioritize the Mortgage

If you have a good credit score and if you live in a two-income household, you have the means to secure multiple loans.  You can obtain a car, credit cards, purchase loans, all in addition to the home mortgage.  If this is the case, secure the mortgage loan first and make sure that you pay your monthly dues on time.

Each application for a loan or credit becomes a burden to your rating. Several credit inquiries hurt your credit score especially if they are filed months before the mortgage loan review process.


  1. Pay off your debts

Pay off as much debt as possible. Start with the many smaller debts because fewer debts on your history ups your chances of getting a good mortgage rate.

At closing, you may end up with a smaller closing amount.


  1. Be strategic when paying bills

Sometimes, you just really have to miss out on payments.  If so, prioritize.  Miss out on the credit card payment first.  Then if you have to miss out on another again, miss out on the installment loan.  Make the existing home mortgage the last one you’ll miss.


  1. Request for your HUD-1 a day in advance

While federal law requires lenders to give mortgage applicants a copy of their settlement form AT LEAST A DAY BEFORE CLOSING, majority don’t give it unless you ask.  Compare your HUD-1 with your GFE or good faith estimate.  If you spot errors, bring this to your lender’s attention immediately.

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