Tackling Mortgage Issues Part 5

In the last few installments we have looked at a few misconceptions regarding getting a home loan. In this final installment we will look into a couple additional pieces of information that can help make understanding the in and outs of mortgages a little easier.

The More Often You Pay The More Money You’ll Save

Many people are under the false assumption that because the mortgage is billed monthly, than the best idea is to pay for it on a monthly basis. This is not true. The interest on your mortgage is calculated on a daily, and not monthly basis. It is billed on a monthly basis, but the interest accrues every day on the balance that is owed. So if you are able to make more than one payment on your loan a month than it is best to do it as soon as you can rather than waiting until the bill comes in. The more frequently you put money towards your loan the more the balance goes down and the less money you will be charged interest on over the life of your loan. Make payments more frequently to save the most money on your home loan.

Refinancing Can Save You Money

Refinancing can be a pain. It’s true. It is much easier to just stay with your current lender than to have to go through the whole process of refinancing your home and doing all of that paperwork. But with the current trends that are going on right now it can make a lot more sense to refinance your home. Lenders are fighting for market shares, discounting fees and trying to get your business. In these instances it makes more sense to refinance. When lenders fight over your business it means that you have more power to make decisions about your loan and have more control over what happens with it. By taking advantage of refinancing you may end up saving thousands of dollars over the life of your loan.

Sean Rasmussen
Property Options Australia
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