Mortgage rates may rise or fall this spring (lately they seem to be falling!)—but that needn’t
prevent you from saving even more money when it’s time to structure your own New
Orleans mortgage. The underpublicized fact is that mortgage rates are only one
of the factors that affect how much you wind up paying. No matter what happens
to mortgage rates in 2014, here are some keys to making mortgage decisions that
result in significant savings:
Tailor the
term
Evaluate your budget and see whether it is possible to
increase the amount of your monthly payment. By increasing monthly repayments,
you reduce the term of your New Orleans mortgage.
Over the course of the loan, this can save tens of thousands of dollars.
Refinance
for five years instead of two
The interest you pay on a refi loan isn’t the only cost.
The origination and other fees can easily end up costing four figures. It’s a
numbers game: simply calculate the anticipated savings from refinancing, then
subtract the amount of the fees. The difference tells you your net savings…and
demonstrates why one of the easiest ways to grow those savings is to refinance
less frequently.
Change to
biweekly
Changing to biweekly payments instead of monthly payment
can save you more than small change. The reason is on the calendar: there are
52 weeks in a year, but only 12 months. If you make 26 1/2 payments every year,
that equates to 13 monthly payments. It’s a stealthy way to make an additional
month’s payment every year without really noticing it. When choosing a loan,
opt for one where the bank allows you to choose biweekly payments (as long as
they don’t want to charge an additional fee). Also request that the extra
payments be deducted from the principle.
Improve
your credit score
On this count, every mortgage guru sounds like a broken
record. Although the average quoted mortgage rate may rise or fall, that’s not
necessarily the rate that you pay.
Your FICO score is the primary determinant of your New Orleans mortgage rate. The
difference between a good FICO score and a bad one can be significant, so get a
copy of your credit card record and challenge any damaging inaccuracies. Lenders
want to see a long history of paying on time with a mixed use of credit.
Mortgage rates in New Orleans will
almost certainly increase in the future because they’re still well under
historical averages. But there are plenty of steps you can take to cut
thousands of dollars from your ultimate New Orleans mortgage costs. And if you
are ready to buy a house in New Orleans this
spring, contact me today—I’m ready to show you what’s coming up at your price
point!
Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
Each office independently owned and operated. All brokers licensed in the state of Louisiana.
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