| As one considers the options when it comes to a | | | | lenders offer incentives for shortening your mortgage |
| mortgage sometimes a person can feel trapped by | | | | payments, because it ensures them that they will see |
| the world around them. Other times, you might find that | | | | their money returned at a faster rate. Sometimes it will |
| there are offers out there that you qualify for that | | | | be a reduction in interest, or your last payment will be |
| perhaps when you first bought your home you may | | | | provided on them. |
| not have qualified for. | | | | Since the mortgage term is being shortened, you will |
| A general rule of thumb is if you do choose to do a | | | | find that the price might go up slightly compared to |
| re-mortgage you need to be certain of the reasons | | | | what you are paying now. Ultimately this means you |
| you are looking to do it, and if they appear sensible as | | | | are paying more towards the principal owed, and the |
| well. If you are doing it to lower your monthly payment | | | | interest owed is also becoming a lot lower. This is |
| by extending it additional years, it becomes an unwise | | | | what the overall goal is to pay less interest and own |
| decision. While it might make your financial burden | | | | your property as quickly as possible. |
| easier at the moment you carry this burden out longer. | | | | But when you do consider shortening your mortgage |
| The only times this should be considered is if there is a | | | | term, remember something very important. While the |
| drastic change in income that cannot be regained, such | | | | term might be shorter, you will need to come up with |
| as a spouse dying or becoming disabled. | | | | more money on a monthly basis. This will leave you |
| If a mortgage interest rate goes down you might find it | | | | less wiggle room in a month for unexpected expenses. |
| helpful at that time to re-mortgage for the remaining | | | | Always take into consideration what might happen to |
| term of your loan. On occasion lending rates will | | | | you in the future and error on the side of caution. |
| fluctuate and a lot of the time you are able to keep | | | | Finally, never shorten your mortgage term by less than |
| the same company you are with. Providing your | | | | a minimum of five years. Doing anything else does not |
| information available is at the same level or even | | | | have the same level of benefits and you simply pay |
| better than the last time you applied you have a higher | | | | more over a slightly shorter amount of time. Instead of |
| risk of getting approved for a new loan. | | | | a re-mortgage at that time, consider adding additional |
| But what about shortening that mortgage term? | | | | payments several times a year applied directly to |
| Generally speaking this is a very good option. By doing | | | | principal, they will have the same effect. This method |
| this you are reducing the number of payments and | | | | also allows you to avoid having the higher required |
| amount of interest that a lender receives. Many | | | | payments due up front. |