There is one type of mortgage that makes it easy to know what to expect not only once a month but over the course of your entire home loan. It’s the fixed mortgage or a home loan with a fixed interest rate. You generally need good credit to secure a fixed mortgage.

Even in hard times, you could say on track with your mortgage

Another thing that you need to secure a fixed mortgage is enough money to cover a larger monthly payment than you’d likely start out paying if you sign an adjustable rate mortgage. Should interest rates drop, you’ll have to refinance your mortgage to reduce your monthly payments.

Refinancing your mortgage is one way to stay on track with your mortgage. Just know that if you take this route, you’ll have to pay closing costs again. You also might have to pay another mortgage application fee. Yet, if your refinancing application is approved, you’ll have less to pay each month.

Fortunately, refinancing your mortgage isn’t the only action that you can take to stay on track with your mortgage. Here are other ways that you can keep your mortgage on track:

  • Start out with a low adjustable rate mortgage then switch to a fixed mortgage before your interest rates spike. (This is a risky move, but if you time it right, it could pay off.)
  • Use your bonus check to pay down the principal on your mortgage
  • Deposit at least half of your tax refund into a savings account that serves as a backup to access should an unexpected event occur and you need additional funds to pay your mortgage
  • Pay off high interest credit cards to have extra money to put toward your mortgage principal
  • Perform required maintenance on your house,including your house appliances, to reduce the number of times that you have to pay for repairs or pay for new appliances

Discipline is a must when it comes to keeping mortgages on track

Safeguards against late mortgage payments should be in place before you take the keys to your new house. Don’t wait until the last minute to develop safeguards. It’s these safeguards that can keep you from falling behind in your mortgage payments should one of the world’s unexpected changes occur.

Have enough money saved to cover four to six mortgage payments. Avoid dipping into these savings to pay for entertainment, clothes or cover the cost of a vacation. Keeping mortgages on track requires you to be disciplined.

One of the best ways to get disciplined is to create a budget and stick to it. Another way to get disciplined so that it gets easier for you to keep your mortgage on track is to start paying bills while you are still living with your parents.

This single decision will teach you to prioritize purchases. It will also get you accustomed to prioritizing purchases until you see that you can invest a portion of your income in savings and retirement funds.

Tagged with:
 

Comments are closed.

Set your Twitter account name in your settings to use the TwitterBar Section.