Failing to pay a mortgage can damage your finances in ways that can be hard to reverse. These simple mortgage management tips can help keep you on the straight and narrow.
Make paying easier
Ask your bank to sync your mortgage repayments with the day you get paid. It can make the money-in, money-out exchange easier. So can setting up automated payments and transfers from your bank. And if you want to pay off your mortgage faster, up your automatic payments when you have the cash. Thinking of investing rather than upping your payments? Check it out to see which offers the best return – and remember investment returns can fluctuate but mortgage payments are sure to yield a debt-free home.
Expect the unexpected
What if you become unemployed, or as a freelancer you hit a dry spell, or you require unexpected dental work? Pre-plan how to handle life’s curve balls without putting your home in jeopardy.
Dip below 80%
If you borrowed more than 80% of the appraised value of your home, you're probably paying private mortgage insurance. Even PMI at 1% can add hundreds of dollars to your monthly payments. Once your mortgage balance dips below 80% of your home's value, talk with your lender about canceling this now unnecessary insurance policy.
Property taxes have a way of creeping up on you. Mark your calendar, set up phone or computer alerts. Just be sure you know when these payments are due. Some banks will roll tax payments into your mortgage. If you find that helpful, talk with your banker.
Refinancing can help save thousand of dollars over the life of your mortgage, but it isn’t free. Closing costs and points add up. It can take at least a couple of years for these expenses and your lower interest rate savings to equal out. So refinance when it makes sense, but don’t make it a habit.