mortagesandforeclosures

by Graham McKenzie

A mortgage loan is the largest debt most people will ever have. The most common length of the loan is 30 years before it is paid off. The ability to pay off a mortgage early or to just lower the payments is very seductive to most people.

There are experts that will offer their services to lower your mortgage but there is no reason why you could not do it on your own. With a small amount of time and effort you could save thousands of dollars on your loan and hundreds each month on payments.

If you have a fixed rate loan with the lowest possible rate then there will be no need to refinance now. In most instances this is not the case and refinancing a loan will bring great benefits. Most home buyers experienced some difficulties during the loan process. It could have been not enough of a down payment or a damaged credit score that led to the higher interest rate. If the problems have been resolved with credit then the refinancing will offer some payment relief and the equity in the home could even help in obtaining a lower rate.

Even if your interest rate is not that bad you should consider refinancing if you are in an ARM or balloon loan, anything other than a fixed rate loan. If you are considering refinancing you should make sure that no missed or late payments have been reported to your credit history and that your score is high enough to get you a better rate.

The best possible interest rate is obtained by having great credit, without it you might be slightly higher than you would prefer. If you have owned the home for some time or have recently updated it with improvements or additions then you have equity in your home that will help in reducing your rate as well. Using the homes equity as a sort of down payment will increase your chances of a better rate even with a slightly lower credit score. If your current loan pay off is $170,000 and your home is appraised at $210,000 then you have $40,000 in equity that can be used towards the refinanced loan.

Make sure your home is in good shape before having the appraiser come out. The higher you can be appraised at the better the interest rate you will receive. In order to obtain the highest appraised value you should complete any projects and make sure the home is free of clutter and offers some welcoming curb appeal.

You need to aim high for the appraised value. The higher the amount the better the investment you will be for the lender. The best rates are reserved for people with perfect credit but even for those of us that may have less than perfect credit there are ways to increase our chances at getting those better rates. A better appraisal means more equity to the new loan and therefore a better investment for the lender. This gives you major leverage on the interest rate as well as the terms. Your credit score has to be high enough to allow you to be approved for these rates so learn how to raise your score quickly if it needs a little boost. .

About the Author:

Graham McKenzie is the content coordinator for a leading South African leading Homeloans and Bond Origination portal which provides access to Nedbank Homeloans.

Get all the information and photos:: http://mortgagewide.info/how-to-save-on-your-mortgage-costs/