With the economic downturn finally behind us, the question remains: Are you on track for a big payoff on your mortgage?
While the answers vary, here are three tips for helping you stay on track.
Don’t delay: While the mortgage is on the books, you may want to keep checking the interest rate every three months to see if you’re getting the same monthly payment.
If the rate is low and the payments are coming in late, you might want to call your lender to let them know you’re still on track, said Jim Cushman, a finance professor at New York University.2.
Look for the best rates: Your lender might be charging a better rate than what you’re used to.
“If you’re paying a lot of money for a house, it might not be worth it,” Cushmansaid.
And if you pay more than you need, your lender might ask for a reduction in payments.
Check the cost of repairs: When you get your mortgage, you should see a cost sheet that shows what you’ll pay to fix the house after it’s been repaired.
That way, you can compare the cost with the monthly payments.
If you can’t find the cost sheet, call the lender and ask to see it, Cushmen said.4.
Check your payments: When your monthly mortgage payments are close to being paid, it may be time to ask your lender for more.
“I’m still paying $4,500 a month on a $1.8 million house,” Cushing said.
“My lender is paying $500 a week, $1,000 a month, $500 an extra month, so I’m paying $1 million a year.
So if I wanted to buy a house with my money, I’d probably pay $6 million a couple years from now.”
Take advantage of loan deferral: While most mortgage deferral programs allow borrowers to defer payments on the loan for up to five years, some companies like to offer homeowners an additional five years of deferral on their home loans, according to the National Association of Home Mortgage Lenders.
The homeowners may be able to qualify for an additional deferral if they file for bankruptcy.