Comments on: How to Save Money on Your Mortgage

By: peggy

peggy — Fri, 16 Oct 2009 00:11:08 +0000

To make your mortgage payments every two weeks, doesn’t that have to be stated in your original loan agreement? My husband and I are trying to refinance because our interest rate is 9-1/4%! You saw it right! Nobody wants to work with us so we are trying to find ways to either pay more or pay more often to save money!

By: Cheryl Peck

Cheryl Peck — Mon, 14 Sep 2009 23:39:14 +0000

Understanding the loan application and closing process will not only help you get the best deal available to you but also help you avoid unethical mortgage brokers and loan officers. In my book “Getting To Closing” (www.CherylLPeck.com), I give readers a step-by-step guide to the process. You will also find additional information to save money both at closing and after.

By: Financial Samurai

Financial Samurai — Mon, 14 Sep 2009 23:05:45 +0000

Hey Lee – Yes, it was hilarious, and as I feel bad hyperlinking my articles too often, you can read about the 13% scenario on my site entitled “Property Makes People Think Irrationally”. I’ll go check out your thoughts. FS

By: Lee

Lee — Mon, 14 Sep 2009 22:31:34 +0000

@Financial Samurai: Couldn’t agree more. I posted recently about my own rent/buy pondering and while I haven’t posted a conclusion yet, even my initial post posited the fact that 30% down as a minimum is a must.

13% down is mad. To have come from a PF blogger? *shocked*

By: Financial Samurai

Financial Samurai — Mon, 14 Sep 2009 22:16:24 +0000

@ Austin – The 30% rule is definitely my rule too. Your dad is a wise man! There’s this 28 year old OF blogger who asks the community whether he should buy his place with “13%” down. It’s so irrational, but also quite intriguing why people are driven, let a lone a PF blogger to do silly things with their money.

By: Financial Samurai

Financial Samurai — Mon, 14 Sep 2009 22:14:33 +0000

Without going into too much detail, on the face of it, I save about $4,000 a year on my rental property mortgage by using my HELOC to pay down principal. It’s a 2% arbitrage spread, which not only saves my about $4,000/yr, it takes off over 10 years of the life of the main loan.

I do like throwing in an extra principal payment every year for the heck of it. My extra payment ranges between the amount of $100 to $30,000 a year, multiple times a year. It’s fun to do, and you won’t even miss the money.

Financial Samurai

By: marci

marci — Mon, 14 Sep 2009 20:27:32 +0000

I’ll have to disagree with getting the shortest mortgage term possible…. I have always gone for the longest and least payment option. Now – that does NOT mean that that is what my payments are – it only means that I have gotten a ‘worst case scenario’ mortgage …. Meaning – if times get tough for me financially, I would not want to miss a payment – therefore get the lowest payment possible ON PAPER…. that’s the minimum you will have to pay.

Then – make payments for twice or 3 times that amount, make extra payments, pay every 2 weeks, throw snowflakes at it, whatever it takes to get it paid off early. My last mortgage was a 30 yr one – paid off in 9 years.

Basically, what I did was buy myself some breathing room in case times got tough during the payment phase. Worked for me. I have done several properties this way – ALWAYS taking a long mortgage, and ALWAYS paying off very very early. It does take self-discipline tho – and focus – lots of both Good luck!

By: Austin

Austin — Mon, 14 Sep 2009 19:48:16 +0000

My father always told me to save up for a house and to not buy it until I have a 30% down payment. For years, I thought he wasn’t opportunistic enough but I’ve come to appreciate what he’s said. While no one got rich that way, we were never poor either, which is much more important to us. If anyone ask me, I will always tell them to be on the conservative side when it comes to mortgages.

By: Renter

Renter — Mon, 14 Sep 2009 17:18:10 +0000

I don’t think 80-10-10 is a good type of mortgage. While it certainly gets around PMI payments, there’s a reason why you have to pay insurance when you don’t have 20% down. In the current meltdown, so many home owners bought houses with 0% down that they couldn’t afford. If everyone bought homes with at least 20% down, we wouldn’t have this crisis to begin with.

By: Gill

Gill — Mon, 14 Sep 2009 17:04:46 +0000

Most people spend the same amount of time deciding no matter how important the decision is. They might spend 1 hour to decide on the pair of shoes they like, and about an hour to decide which mortgage they will pick. It’s amazing to me why this happens, but it does.

Spend more time researching your options, or else don’t complain when you didn’t get a good deal.