Do you want to save money on your home loan? Sure, we all do, that's a no-brainer. Especially in these difficult financial times, everyone wants to lower their expenses and it is true that the biggest expense in every household is that of the mammoth mortgage bill due every month.
Lowering your mortgage can be a huge deduction in your monthly expenses and can dramatically increase the amount of extra disposable income you have. Lowering your mortgage can also greatly reduce the amount of stress in your household and that is something everyone wants to have.
Steps to Planning How to Lower Your Home Loan
The first step is that you must examine your mortgage and set a goal as to what you want. Are you in a fixed-rate loan and want to change it to a variable-rate loan, or is the opposite true? Determine how much you owe and if you can afford a 30-year loan or a 15-year loan.
The next step is to determine the interest rate you are paying. Hard to believe, but many people do not know the interest they are paying on their home loan. This is crucial. Interest can add on tens of thousands of dollars to the true cost of your loan.
You should contact your bank and see what types of loan rates they offer to current customers. Also ask your bank if they can offer you a refinance of your current loan.
Make sure your credit is in great condition and that you do not have too many debts. Pay off debts if possible. Your bank will want to know if you can afford the payments on your new home loan.
Check out Bankrate.com for up-to-date information on interest rates for home loans and refinance loans. You can also check out other websites that offer this data. Your bank or competitor banks often post their rates right on their front page.
You must watch out for hidden fees and charges. Tell your bank you don't want these fees and that they should be removed. You want low interest and no fees and charges, if possible.
Lastly, be ready for a long process in getting your refinance loan. It can take many weeks or months to complete, and you really have to be persistent. Banks like to charge high interest because that is how they make money. Be persistent and you can end up saving lots of money and your life can be much easier.