To the homeowners out there... a question for you.
Ok im looking into buying my first home and i actually close on it in a few months I just wanna know is there any way to possibly lower my mortgage payments at all? I have the mortgage no prob but i would like to save me some cash if I can. any help/advice would be appreciated
apply for the homestead exemption. you have to be living int he ouse on january 1st to be able to qualify. also if you put money down that obviously reduces the payment. make sure you totally understand what you are getting into. my bank was not very clear with me and i got kinda fucked. they locked me into a rate i didnt agree to 3 days before closing (its a crazy story..pm me if you really want to know) and failed to tell me about pmi(private mortgage insurance)....just ask a bunch of questions and make sure you totally understand whats going on. im not 100% sure but there might be a way for you to pay your taxes and HO insurance without escrow...that will also lower your payment.
good luck on the house..its pretty rad having your own place! you gonna get the seller to pay closing? i got $500 back at closing.
really interesting. Yeah i am gettin money back im just worried about the intrest rate along with the whole loan period. Im getting it off the foreclosure and through FHA so im not too worried i just want to try to get the Mortgage payments lowered so while me and my 3 roomies are paying the mortgage i can take some extra money to pay the principle directly. i heard that doing that helps and I can refinance to get the payments even lower. Im not worried about makin it take longer because im just goin to pay the principle as much as i can along with the mortgage. I figure its as good a a plan as any while I still have roomates and that way it'll make it cheaper
There are several ways...
#1 have a large enough down payment so you dont need PMI. This depending on your mortgage can save you approx $100+ off your payment.
#2 Pay cash for closing costs.. your closing may only be $4-5k, but it does make a difference.
#3 Pay your homeowners and/or property tax without escrow. Granted escrow does make it easy by diving your bills up monthly, it really depends on your financial situation was to whether you can save your money without escrow to make the payment.
ALSO with room mates, Stash money away when you get it! You can't always count on room mate income, I've had friends get into hard times when that income was gone (IE they moved out lol).
Granted this wont change your payment, but check out Bi-Weekly payments. You pay the exact same mortgage payment amount, but pay half every 2 weeks. This actually cuts a few years off the life of the mortgage since the interest doesn't accrue as quickly.
that sounds like a plan the idea is to get the thing dropped at least 200 so it'll be like what I paid for my first apt.
The thing above about PMI is not true.. I put 30% down on my home.. but because I have a FTH loan for First Time homebuyer which got my interest rate down.. you have to pay PMI for 5 years...
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i also did a fth loan i can apply to drop pmi after 15% of the home value is paid or it drops automatically after 20% is paid. so untill i can pay off $18-24k im stuck with it. the way it was explained to me was that if i had put down 20% pmi would be waived....but i didnt have $24,000 laying around for a down payment on my house.Originally Posted by The Ren
regardless of the stipulations just make sure you educate yourself on what your bank is doing. make sure you have a full understanding of what you are getting into. i was expecting a $900/month house payment becuase i was under the impression that i could waive the escrow and pay it at the end of the year and i was not aware that i would be forced to have pmi...i would have had my $900/month payment but after escrow and pmi i pay $990/month.
also, the bank i went through kinda persuaded me to wait on the rate to drop (which is illegal) i was under the impression that if i didnt have a rate locked 3 days before closing the financing would not go through, i would lose my earnest money ($500) and we would have to submit an offer all over again and start from scratch. i was fione with this as i wanted a good rate. when i was pre-approved the rate was 5.875% i wanted to lock a week later when it was 6.125%...they told me i had plenty of time and it may come down. i waited and with 3 days left before closing i called my agent to tell them financing might not go through as im not ocked into a rate yet. they called the bank and then called me back to tell me that the bank had locked me in at 6.675% and the loan had already gone through...i had $120k waiting for me to hand over for my house! thanks shitty bank...im glad you made the choice for me!
sorry for yapping on and on but i just wanna let you know how shitty it was for me so you dont make the same mistakes i made. i thought i was doing fine but found out really fast that i was not as educated on the whole experience as i thought i was. anyways..good luck with it...its pretty exciting when you are done signing all those papers with the lawyers and they give you the keys to your own house!
1. Make sure a lawyer looks over the mortgage contract. You can usually get a complete copy of it a few days before closing and then have a lawyer look it over for only a couple hundred dollars. If you cant afford that 1 time expense, you really need to wait on the house. When it comes time to close on the mortgage, bring the copy you got early with any notes you and the lawyer made, then re-read the official copy of the mortgage, question and throughly understand even slight differences.
2. Have at least 3 months, preferable 6 months, of mortgage payments stashed away. Dont touch that for any reason except dire emergencies in which you cannot pay your mortgage. Any other payment can wait, but always keep the mortgage up to date.
3. I dont believe it applies to a foreclosure, but make sure the house is inspected by a pro that knows what to look for. It costs a bit of money, but it could potentially save you ALOT more in the long run.
4. Best way to get payments down is to make extra principle payments. I read a while back that paying 10% principle extra every month can take 25% off the life of the loan, and as much as 10% off the total intrest paid. Your payments will be re-calculated yearly to account for changes in taxes and any extra principle payments you make, so while you have roomies, get your emergency money together, then drop as much extra cash as you can into principle.
5. If you havent secured financing yet, call around and really search for the best rates. Even a seemingly small difference in rates can save you several thousand over the life of a loan.
I already got 2 and 3 down already, 4 was the plan from the get go seein as my roomies arent going anywhere for a long time. So I definitely got the money and what i told them we all pay for rent should help with the principle all together. I told them 400 a piece and since ther is four of us I figure that could cover all the bills and the mortgage and i can take more and put it into the priciple directly since i dont usually buy much to begin with. I just kept hearing it would drop over time or that I would have to refinance for it to drop or something. the plan to pay the principle hasnt changed just wanted to make sure.
If it lowers the rate I can put more in and pay things off faster. that's the idea anyway.
Uhh I bought my house with a FTH loan, 10% down, and paid closing costs. I dont have any PMI.
all fth plans will be set up different. they are not the same across the baord
buy down the rate.
I close next month and have bought my rate down from 6% to 4.5% for less then 1500,funny thing is I am not paying for it the seller is as apart of closing.
I also bought a foreclose for $50,000 less then its worth and $38,000 less then the reposed the property at.
I figure this was my way to make a huge impact in the 401K money I have lost in the last few weeks.
Interesting.. I was told by my mortgage consultant all FTH loans include PMI until either 20% is paid or the first 5 years of your loan.
Val For President
R.I.P. Our Dear Leisa..
ASAP N.E. Chapter VP
No more supra
__________________________________________________ ________________________________________
NIKON Squad member| NikonD40
OMG, some of you guys really are misinformed.
#1. There are several different First Time Homebuyers programs, so there is not one single rule other than you have to be a first time buyer.
#2. FHA loans ALWAYS have MI. It's called MIP. Even if you have 20% equity, HUD is NOT required (unlike other loan types) to remove that MIP. So there is one of the drawbacks of FHA financing. It has many pluses, but that's one of the minuses.
#3. Paying extra to the principal is NOT going to reduce your monthly payment requirement. Paying extra only decreases the total amount you owe and thereby possibly the total amount of time to pay it off is reduced which in turn reduces the total amount of interest you pay over the life of the loan. The only way paying extra principal will reduce your MONTHLY payment is when you refinance because there is LESS that needs to be borrowed the second go around.
#4. There are plenty of ways to avoid MI. It is just based on what amount you have to put down. You will likely need to get 2 loans vs a single one though.
#5. The MONTLY payment is a simple math equation. There are no hidden trap doors nor mirrors. The amount you owe X the interest rate / length of the loan. That's it. There is no, "pay extra this month and next month it will be less". It does NOT work that way. You have a set payment schedule. That payment schedule does not change unless you refinance the terms of the loan, i.e. get a new loan.
With this said, the only way to reduce your MONTHLY payment amount is one of two ways: Buy LESS or Borrow LESS. That's it. Now, what some people do is that they pay directly to the principal for a few years, their house appreciates, so they refi (it's called rate and term refi when you just refi to lower your payment btw) that lesser loan amount at preferably a BETTER interest rate and THEN they get a lower monthly payment. Although most people that I have seen pay extra to the principal do so to pay off the debt quicker rather than to try and save monthly payments down the road.
Anyway, I hope this helped.
Thanks for the Info
Val For President
R.I.P. Our Dear Leisa..
ASAP N.E. Chapter VP
No more supra
__________________________________________________ ________________________________________
NIKON Squad member| NikonD40
Welcome.Thanks for the Info
Oh, and BTW.....paying the escrows outside of the monthly payment is really a mirage. You will still owe the exact same amount if you pay them or if your mortgage company pays them. Matter of fact for the majority of people it is easier to have it included in their payment because they don't have the means to pay a large payment once or twice a year to the county and the insurance company. You have to have them regardless, so it's not like you get some kind of price break if you pay it out of the escrow account or your personal account. It will always be the same amount, so there is no real advantage at all.
Interest paid toward your home is a write off on your taxes.... But only if you itemize.
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Yeah, lol that's pretty much what I was going to say ^
You don't have to fully itemize. It's a simple line item on the IRS form.
You're as right as right can be on all other points but I'm going to have to disagree with that one. You have to file form 1040 (no 1040A or EZ) and itemize using Schedule A.... unless something changed very recently that I don't know about since I'm not working in public accounting anymore. I'm a homeowner and I'm actually an accountant. I did taxes (corporate and personal) for years for a living. (Not H&R Block or some crap like that, I'm a real accountant that works for an accounting firm)
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I was being over simplistic. I've not filed an "EZ" form in decades.....
Aaah.... Schedule C.... my favorite
But yes, you must itemize your deductions using Schedule A instead of taking the standard deduction in order to deduct your mortgage loan interest.
2005 Mazdaspeed MX-5 -1.8L Turbo
Schedule C.....where everyone has to go to confession afterwards.....Aaah.... Schedule C.... my favorite
But yes, you must itemize your deductions using Schedule A instead of taking the standard deduction in order to deduct your mortgage loan interest.
Its not a bad thing adding your taxes into your mortage b/c at tax time you don't have too get the money together and risk losing your house for a couple of grand. They should also refung you whatever is extra after they pay your taxes. But some people would rather pay there taxes w/o including it, which makes the payment lower. Also you should shop around for the best homeowners insurence, you can check with your auto insurence agency b/c the more policies the more discounts.
One more thing someone said something about your closing cost being 5-6 grand, that depend on the total amount of the loan for the house. My closing cost was almost 15 grand. Good luck and congrats Home Owner!!!!
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