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Tips On Mortgages & How To Manage Them

Tips On Mortgages & How To Manage Them

After many months of hard work and determination, your dream of homeownership is coming true. Throughout the process you might have learned a lot about budgeting, mortgage rates, and how to determine which type of home loan is best for your unique financial situation.

Now that you are a homeowner, it’s time to start considering how to manage your mortgage. The hard work likely won’t end after you sign on the dotted line, so you will need to learn the best ways to ensure you make your payments on time and in full each month over the life of your home loan. Here are a few of our favorite tips on mortgages to help you learn how to best manage yours.

1. Always make your payment by or before the due date.
Your mortgage is not a payment that you can delay or put on the back burner. It should be at the forefront of your mind each and every month, and it’s wise to consider taking proactive steps to make sure you don’t ever miss a payment.

If you know that you tend to miss due dates or deadlines, or that you prefer to have a safety net or monthly nudge to do things on time, consider talking to your lender about setting up automatic payments. A more self-managing option is to set reminders for yourself in your phone, in your agenda, or on your calendar. Stay proactive about making mortgage payments without delay in whatever way works best for you.

2. Deal with missed payments immediately.
If for some reason you do miss a payment, contact your lender as soon as possible. Explain the situation clearly so that they understand the situation, then make a plan to make your payment as soon as you can to get your account up to date. Do not delay payment, and communicate with your lender if there is a problem.

3. Know that paying extra on mortgages is a good option.
Trying to figure out how to pay off a mortgage faster? Paying extra on mortgages when you have excess cash for any reason is generally a great way to get ahead of your balance. If you get a raise, earn a bonus, or have extra income, you could use that money to make extra mortgage payments.

Paying off your mortgage sooner means that you’ll have one less monthly bill to deal with — and you can forget about mortgage interest rates. And if you pay off your mortgage ahead of schedule, you can use money you’d otherwise spend on interest somewhere else. Remember that if you make additional payments on your mortgage that aren’t expected, you need to mention that it is a principal payment.

4. Create a solid budget and stick with it.
When you own your home, you might feel the desire to invest in it further by renovating, buying furniture, or completing a few home renovation projects. It’s best not to overspend when you first purchase your home, because you never know what unexpected expenses might arise along the way.

A good rule of thumb is to only invest further in your home when it is well within your financial means. Start by creating a budget based on your income and your expenses, and then stick to it. When you want to take on a home renovation project or upgrade, plan for it with your budget. And if any extra expenses come up, use your savings to pay them off while making sure you still make all of your mortgage payments on time.

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