How to Reduce Your Mortgage by 10 Years or More?

By:Nazir Hussain

A big rise in home ownership over the past 20 years means that people are in debt because of mortgage borrowing. Invariably, a mortgage is a huge and life long commitment and can go into ones retirement. There is evidence that a mortgage loan can run into couple of generations in some countries. For example, father buys a home for himself and the grand children finish paying for it. Luckily, it is not as bad as that in the western society yet.

Good news is that there are ways to reduce your monthly instalments in respect of your mortgage. Lower monthly outgoings can mean an increase in your disposable income. Bigger disposable income helps to improve the quality of your life. Better and improved quality of life does not stop there, below are two strategies to help you get rid of the burden of mortgage debt:-

Switch your mortgage between lenders.

In the absence of switching lenders on a daily basis, you can switch your mortgage between different lenders and each time taking advantage of the best deal. For example, Bank of America is offering a discounted deal at the introductory rate of 2.99% fixed for 3 years. The normal arrangement with discounted deals is that the interest rate reverts back to the standard variable rate at the end of that initial 3 year discounted period.

If the saving you make via this special deal translates into say $3,000 per year. You have the option of reducing you total mortgage by $3,000 by making a lump sum payment $3,000 to your lender at the end of the year and reduce your total borrowing. Over three years, you can reduce your borrowing by $9,000.

At the end of that three year special deal, look for some other lender with a similar or better deal and just switch your mortgage. But, it will cost me money to switch lenders? Not at all. Most lenders will cover all your switching costs. Taking advantage of another three year discounted deal will result in another $9,000 saving. You can switch and save money for the life of your mortgage and make yearly lump sum payments until your mortgage is paid in full.

How much money have I saved & how many years can I shave off my mortgage from these savings?
The money you save by the discounted deal over 4 years is equal to two year’s mortgage payment. Therefore, over 20 years of switching between lenders you will shaved 10 years off your mortgage. For example, you will have reduced your 30 years mortgage to 20 years in a straight line.

Opt for a daily interest rate mortgage and not for an APR (Annual percentage rate) one.

Deals like one account offer you the chance to pay interest on your mortgage on a daily basis. The distinct advantage of one accounts is the total flexibility. It is a life style mortgage because it gives you payments holidays if you so desire. Smaller payments due to change in financial circumstances is also possible.

Total flexibility in the way you want to pay your mortgage also allows you to make higher payments towards your mortgage debt. An extra payment of $10, $20 or $40 per month, it is estimated, can reduce your total mortgage by as much as 10 years.

Flexible mortgage does not need to be switched between lenders every three years. So, you can save yourself the hassle of switching between lenders. You can choose to make lower payments but if you want to pay your mortgage off early then pay a bigger instalment than required and you would have paid your mortgage ten or so years before time.

Finally, we have outlined two methods of reducing your mortgage payments. I am sure there are other equally valid methods and products on the market. We recommend a thorough search of the market and products before making a commitment.

Digg del.icio.us Blink Stumble Spurl Reddit Netscape Furl

Article keywords: Mortgage, borrowing, buying a property, home buying, home for you, which mortgage, tracker mortgage

Article Source: http://www.articles2k.com

Pay off your mortgage early and live life. This is possible. For more information on mortgage products visit the mortgage info. site http://www.4mortgagessite.com and take action.

Top Mortgage Articles
1). Home Loan Center – Does The Type Of Lender Impact The Type Of Mortgage You Can Get? By : Dean Shainin While deciding on the right lender, one should address the following questions: Does it really matter where you get your first mortgage? What is the difference between different types of lenders, and how does that impact on the mortgage you can get?
2). Mortgage Refinancing Below 500 FICO By : Tristan Hunt If you have been turned down for a mortgage refinance, especially a cash out or debt consolidation refinance, because your lender says your credit score is under 500, there are a variety of new options and strategies available which can help you get the cash you need now to pay off your credit card debts, collection accounts, and other derogatory or poor credit accounts and improve your FICO credit score to the point where you can qualify for a low interest, fixed rate loan.
3). Mortgage & Refinance Tips: Determining Your Income By : Tristan Hunt When you apply for a refinance, debt consolidation or purchase mortgage, one of the most important factors in qualifying for the loan is your income. That may not seem like much of a surprise, but you may be surprised at all of the different ways your income can be calculated based on how well you can document it, and how much this can affect your loan process.
4). Mortgage Terms and Definitions By : Dan Lewis The mortgage process can be a little confusing if you aren't familiar with the terms used in the process. To help you out, here is a list of terms with corresponding mortgage definitions. Broker: An independent mortgage professional that oversees the entire home loan process. Lender: The business entity providing and funding the home loan. Processor: Prepares your loan for underwriting.
5). Is Your Subprime Mortgage Lender A Predatory Lender By : Subprime lenders offer financing for people with low credit scores who don’t qualify for a conventional loan. Subprime financing can be offered through traditional mortgage lenders like banks, credit unions, or mortgage lenders. There are also specialized lenders who only deal with subprime mortgages. Predatory lenders charge high fees, write loans in vague terms, and structure payments so they can foreclose on property.
6). Make the Most of Your Mortgage Leads By : Jay If you are a loan officer or mortgage broker and you invest in mortgage leads, or you are considering investing in mortgage leads, make sure you are making the most of them. A lead provider, if they are a good one, can provide you with a good quality lead, the rest is up to you. The lead provider has no control over what the potential customer might say.
7). Fha Mortgage Loans - The Benefits Of An FHA Mortgage By : Carrie Reeder The Federal Housing Administration (FHA) insures mortgages to allow low to moderate income families to purchase their own home. With government backing, families can buy a home at a lower initial cost. However, there are limitations with this program. Mortgage Insurance – Section 203(b) The FHA provides mortgage insurance, not mortgage loans to families.
8). Use A Mortgage Calculator To Guide Your Home Equity Loan Decision By : Gerald Mason The difference between a home loan and a home equity loan lies mainly in that the home equity loan, also known as a second or even third mortgage, is issued at a higher interest rate. This interest rate is lower than you could expect to pay on a credit card, but it will be still higher than the original interest rate. Use a home equity mortgage calculator to see what releasing different percentages of your equity makes to the payments required.
9). Fixed Rate Mortgage Loans - Understanding The Basics By : Carrie Reeder Fixed rate mortgages are the most common type of mortgage loan for home buyers. With predictable payments, long term homeowners can plan their budgets and guard against rising interest rates. But a fixed rate mortgage is not for everyone with its higher interest rates and a reduction in your buying power. Fixed Rate Mortgage Features A fixed rate mortgage features set rates, long term low monthly payments, and low risk.
10). FHA Home Mortgage Purchase Or Refinance Loan - Why You Might Consider Getting An FHA Loan By : Carrie Reeder Most borrowers have heard of FHA home loans. They are very common. You hear about them mostly as loans for first time borrowers, which is common. However, most people don't realize that FHA loans can also be does for refinancing. They are not only for purchasing a house. HUD owns and operates FHA, which is a program designed to help borrowers who might have difficulty buying a house.

New Mortgage Articles
1). Getting a Mortgage Approval By : MITCHELL HAMPSON Looking to get approved for your very first home mortgage? Here are the tips that you need to have for sure fire approval
2). Deciding on Whether a Reverse Mortgage is For You By : Search For Classes Many seniors want to enjoy their golden years, but are unable to find a way to increase their monthly income or decrease enough of their monthly expenditures in order to retire at an age that will afford them the opportunity to do so. One way to circumvent this problem is through obtaining a reverse mortgage. A reverse mortgage enables homeowners older than sixty two years of age to convert the equity in their homes into tax-free income while they continue to reside at their property.
3). The Basics of Reverse Mortgages By : Search For Classes Reverse mortgages are loans against your home that require no repayment for as long as you live there. As opposed to regular mortgage loans, reverse mortgages have no income requirements and are based solely on the equity of your home or condo. There are no monthly payments to make as the mortgage is due only when the borrower is no longer living at the residence.
4). When Will Ben Bernanke Blink? Is the Federal Reserve’s Rate Raising Fight Against Inflation Going Too Far? By : Sydney Jackson There is a lot of speculation and debate among economists about whether the Federal Reserve will raise the Fed’s short term interest rate to 5% in their meeting on Wednesday. If they do, it will make 16 straight jumps of .25%, since it reached it’s low point of 1%. Most people seem to feel that statements by Fed Chairman Ben Bernanke have sent mixed signals about whether or not this meeting will be the time for a pause.
5). Remortgages: The Helps and Hazards By : James Smiths When you remortgage you home you, just as the name you imply, get a new mortgage that replaces the existing one. This is usually something that takes place when the market interest rates drop down below what you are paying. Most often this is something that is considered by homeowners who hold fixed rate mortgages. The Helps Remortgaging can be helpful in quite a few different ways.
6). Buying To Let: Is It For You? By : James Smiths If you read the title of this article and thought to yourself, "Let what? What am I letting happen buy buying? And what am I buying?", than this article is definitely for you. First let me establish that the "buy" refers to a house and second, the "let" part, that refers to renting that house out to someone else. Basically it means that you buy a house and let someone else pay the mortgage and live in it.
7). Mortgage and their debts By : devi Purchasing a house has been a vision for many. But it is impossible for an average man to possess a huge sum of ready cash to procure the property; the only remedy here is, going for mortgages. Mortgage can be defined as a loan which will provide monetary help to purchase any real estate property. The borrower can make his payments regularly to the lender.
8). UK mortgage and remortgage deals By : Groshan Fabiola Mortgage is a way of securing a debt by using your own property as a guarantee to the lender. If For some reason you cannot pay your debt in time you may lose the property. The term mortgage itself refers to the debt and also to the legal device used when securing the property. In the countries where properties are highly demanded and the prices are quite elevated, there are strong loan and mortgage markets.
9). Getting the right mortgage By : john Selecting a mortgage can be a difficult task. First of all, you need to decide which mortgage would suit your needs best. For those who want to know what their monthly outgoings are going to be, should look at a fixed rate mortgage, as these are mortgages that are set at a fixed price for a certain period, which can be anything from 1 year to 5 years.
10). Cheap Mortgage Rate By : Danny Wirken Must-Ask Questions When You Get Your Mortgage Whether you're buying a house or refinancing, there is more to a mortgage than the rate. Here are eight questions to ask while mortgage shopping. You'll have to ask yourself some of these questions; others can only be answered by mortgage professionals and insurers. How long do I plan to stay in the house? That's often a hard question to answer.