Whether you own a home or are looking to buy one, mortgages can be confusing. This week on Fox 59 I talked to Ray Cortipassi about mortgages. Watch the clip below courtesy of Fox 59 to hear what 3 things you need to know about your mortgage.
Hopefully you budget properly so you can make your mortgage payment on time every month, but if you don't there is a common misconception about when a mortgage is late. Say your mortgage is due on the first of the month, most lenders will give you a 15 day grace period to turn in your payment without it affecting your credit score. That is wonderful, but what they don't tell you is that often you are incurring extra interest fees during those 15 days that is tacked onto your mortgage. Budgeting isn't easy, but it is worth it so you aren't constant wracking up late fees.
Most people pay their mortgage monthly but there is a bi-monthly option available that can save you a lot of money. Instead of paying your mortgage in one lump sum at the beginning of the month your lender will split that payment into two payment throughout the month. How does this save you money? By increasing your contributions throughout the year, you will cut your payback time down significantly and save an incredible amount on interest. It's a win-win. Sometimes financial wellness is about researching new ways to do common things. This is one of those scenarios. A few minutes online or on the phone with your lender can set you up to save a lot of money.
If you don't have any consumer debt I highly recommend rounding up your mortgage payment. For example, if your mortgage payment is $773 just round that amount up to $850 or higher if you are able. If you don't have other types of debt then attacking your mortgage is a great place to allocate your money. If you are still working on a plan to get out of debt you should just be paying the minimum on your mortgage. But when are out of debt, your next goal should be to pay off your mortgage as soon as possible.