| Reducing your home mortgage loan may not be as | | | | have a significant negative impact on what you'll end |
| difficult or cumbersome as you might at first think. | | | | up paying out of pocket over the life of the loan. |
| Since very few people are able to purchase a home | | | | A larger cash down payment can also help you avoid |
| for cash outright, most have to get financing, usually a | | | | Private Mortgage Insurance, or "PMI". Private Mortgage |
| bank loan or mortgage. Here are a few tips and hints | | | | Insurance is often required by lenders when the buyer |
| on reducing your mortgage and buying your dream | | | | opts to put less than 20% of the principle down on the |
| house. | | | | deal. Avoiding PMI can save you quite a bit of money |
| The first, and surprisingly often overlooked tips is | | | | as well. |
| mostly common-sense: as with anything else you're | | | | Loan duration of a mortgage, plus your interest rate, |
| making a 'purchase' decision on, shop around. Talk with | | | | will determine how much you will have to pay monthly. |
| more than one bank loan or mortgage officer or | | | | Many people opt to go for longer duration loans in |
| broker. Too many people take the first offer handed | | | | order to have lower monthly mortgage loan payments. |
| to them, or assume the lender has their best interest in | | | | While this might enable home buyers to purchase |
| mind and is making them the best possible offer at the | | | | property or a home they otherwise wouldn't be able to |
| best available interest rates. | | | | shoulder, it virtually insures you will pay considerably |
| Nothing could be further from the truth. Most of these | | | | more in the long run. You may also have to take a hit |
| brokers and lenders are working on a commission | | | | not just on your interest rate, but on your credit score |
| structure, meaning not only are they only getting paid if | | | | and future credit-worthiness. After all, you will be in |
| they can get you to sign on the dotted line, but they | | | | debt for a longer period of time. |
| may very often pocket a larger commission if they | | | | Home mortgage loans used to run between 10 years |
| can get you into a pricier loan. | | | | and 30 years, however it's becoming increasingly |
| Another consideration is your down payment. The | | | | common to see loans lasting 40 years. Recently, some |
| more you can put up initially, the better your interest | | | | lenders and brokers have been pushing 50-year term |
| rate and loan terms are going to be. You'll have more | | | | loans. And while this lowers the base monthly cost, the |
| latitude in negotiation as well. While many home buyers | | | | actual cost in real dollars might be considerably higher. |
| look for the lowest possible down payment, this can | | | | |