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We all pay the same amount for our home loan each month, so why not try this idea that will permit you to go on to pay the same amount, but saves you thousands of dollars on your mortgage? Not many homeowners realize how effortless this can be.

Most of us receive our paycheck once every two weeks. As we all know, things are much easier in the beginning of those two weeks than at the end. Yet, if you examine your expenses, they seem to remain relativelyfairly fixed.

The reason for this phenomena is that we pay the bills and spend additional money e have the the money, and when we don’t, some bills don’t get paid. The solution to this problem is to budget your money in general, but budgeting the mortgage payment, the biggest single expense for most people is sure to help the problem.

You can shave as many as seven years off the length of your mortgage with this process, and save thousands of dollars in interest while you do. A simple instance of an $80,000 thirty year mortgage, with a 7% interest rate would yield about $25,000 in savings over the life of the mortgage.

It’s easy: mail in half of the loan before it is due, and the other half on the due date. (Most people pay their home loan at the end of the month, so it reaches the bank on the due date.).

This one week earlier payment plan builds up the payments on your principal, so that your entire loan is paid off earlier. This will make your interest payments to be less over the whole term of the mortgage.

Because of the way mortgage interest is calculated and paid down, most of your initial mortgage payments are used to pay interest, and only a small part goes to principal. Because of this, you continue to pay interest on the bulk of the principal. Once you increase the frequency of payments, the interest is reduced more quickly and the principal begins to be paid down. The end result is that the principal is paid down ahead of term!

Your bank may have a special form for this type of operation, but even if they don’t, just send your payment in with your mortgage number clearly indicated on it. Or you can make copies of your payment form and send them in with the additional payment.

As you can see, without any effect on the total impact on your monthly expenses, you have found the magic recipe for saving tons of interest and paying your mortgage down ahead of time.

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In the newspapers, on TV and especially on the internet, ads and headlines bombard you about the great rates and terms this or that lender can give you. How can all of them have the greatest rates, you ask.

One way to avoid come ons like this is to make sure you are familiar with the bank. If the lender with the most attractive rates is not known to you, get any information you can. You can verify them with the Better Business Bureau or the state banking commission to learn if they have had a lot complaints against them.

Another idea you need to do for a problem free closing is to choose a bank that specializes in your kind of loan. Discover how long they have been in operation and how long the broker you will be working with has been with the company. If you deal with an established, reputable company, it is unlikely that there will be any surprises at the closing.

You can learn a lot about your potential lender by making enquiries. With all of the information available to us today, it can be hard to find the rightnformation. study the different types of home loans available and what the payment terms are. In this manner, you can make a list of various loan types with the rates and terms in order to compare.

You also have to realize who the rate quotes are for. Most of the time the advertised rates are for the most credit worthy borrowers, and premiums are added to anyone with a worse credit rating. So get the premiums over the best rate so you can make proper comparisons.

After you have a list of rates, you can make your comparisons. Remember the old saying, if its too good to be true, it probably isn’t. If all of the 30 year mortgages you are getting quotes on are within a 75 point spread and one lender boasts 200 points lower, beware!

Don’t let any broker force you into a quick decision. Make sure your broker wants to take the time to explain terms, rates, points, maturity, and anything else to you. One sure path to headaches is to not understand the loan proposal in the first place. Stay away from any broker who is not happy to answer your questions.

Once the terms are decided upon, make sure you get them in writing. Check that all terms are in the written agreement, not only your rate and points. Be sure that the index on an adjustable rate mortgage is in the agreement. Make sure all the terms of the lock in period are in the agreement. Make sure the broker is authorized to negotiate on behalf of the bank. Most problems in home loan closings are the result of issues that are not confirmed in writing ahead of time.

Read the final agreement and make sure it conforms with your understanding. Don’t allow the lender to put in legal language that you do not comprehend. If it does not appear to agree, have the words changed to protect your interests. If the broker cannot or will not do that, go back to your list and find a different bank.

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