Feb 232012
 
Institutions offering mortgage loans are a dime a dozen. These days, there is a lot of competition between financial institutions because they all want your business due to the economy. Doing a search for cheap mortgages on Google will pull up approximately 19,100,000 results. That is how many institutions want your business.

Why is this? As once being a bank teller/customer service rep. I learned very quickly it’s not your savings or checking account that makes the bank money (or any other financial institution), it’s the mortgage loans they write. To make a rate look good to you, most banks offer a .25% discount on loans if you have them electronically withdrawn the day they are due. The thing to think about here is could you get yourself a mortgage loan elsewhere that has a lower interest rate and possibly offers you that same .25% electronic withdrawal discount. In this instance, you’d be saving .50% on each payment over the bank that doesn’t offer the lower rate to begin with.

Understandably, there are times when you have to go with the loan rate you’re offered. That was my case due to the type of home we purchased and the assistance attached to the home for my son. This doesn’t mean though that I can’t cut the life of my mortgage therefore saving on interest.  So, how do I do this?  All I need to do is make one extra mortgage payment a year – I could have my mortgage paid off in 15 yrs. on a 30 yr. mortgage. So any time you find yourself with money to spare – even an extra $50, apply it to your mortgage. In the long run you’ll be saving yourself a lot of money on interest.  

In addition, there are many free online mortgage calculators.  If you know the interest rate, the amount you’ll be putting down and for how long you’re looking to borrow the money – you can get a pretty good idea of what your payments would be and how much of your payment goes towards the interest. 

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