Managing Your Home Mortgage

• Your home mortgage is your most important debt obligation.
  It should be the first obligation that gets paid each month.
  
  If you find yourself unable to make your mortgage payment, discuss your situation with your lender. In most cases, they may be able restructure your loan that meets your budget.
  
  Some important rules on home mortgage management.

a: Paying On-Time, Every-Time:

• It is extremely important that you make your mortgage payment on time each month for the amount required.
  
  Missing a payment, or even being late a few days, can cost you extra fees and affect your credit report.
  
  If circumstances prevent you from making timely payments, contact the lender 5-10 days prior to your payment due date and explain your situation. Many lenders will work with you to prevent costly fees and adverse credit conditions.
  
  
• Some procedures that you can take to avoid any payment problems include:
  
  
  1. automated draft
  2. automated bill payment
  3. online bill payment
  4. bill payment services
  5. payment exchange services
     
     more information about these services
     

b: Quick Mortgage Payoff:

• The fastest way to pay down your mortgage is to start with a shorter term.
  
  Both fixed rates and adjustable rate mortgages come with 15-Yr terms. You can payoff your mortgage in half the time and reduce your total interest costs by approximately 2/3rds.
  
  Of course, you will need to make a much larger monthly payment under the 15-year term that may not be feasible for most home buyers.
  

• If you like the option of paying off your mortgage faster but currently can't afford to pay the 15-year term,
  consider pre-paying your mortgage a little each month.
  
  For example ($100,000 Loan / 7.50%APR / 30-Yr / $699.21 Payment):
  
  If you paid $25 extra each month ($724.21), you will payoff your mortgage in 26 years and 8 months, saving you $20,663 in interest charges.
  
  If you paid $100 extra each month ($799.21), you will payoff your mortgage in 20 years and 5 months, saving you $56,312 in interest charges.
  
  More information about these accelerated mortgage payoff plans at our affilated site: PickMyMortgage.com
  
  
  

c: No More PMI:

• Private Mortgage Insurance (PMI) is required for all home buyers who did not meet the 20% or more down payment requirement for home purchase.
  
  
• Question: when does PMI stop?
  
  You can cancel your PMI when the lender can be assured that the appraised value of the home has met the 80% threshold.
  
  But note: you must initiate the cancel order — the lender will not do it for you unless:
  
  
  • you purchased your home after July 29, 1999
    
  • you reached the 22% of the original property value
    
    

  in which case the lender must automatically terminate PMI: see the FTC site for information
  
  more information about PMI at our affiliated site: PickMyMortgage.com
  
  
  

d: Avoiding Foreclosure:

• If you repeatedly fail to make your mortgage payment on time, your lender has the right under the mortgage contract to enter foreclosure proceedings.
  
  Foreclosure proceedings can vary by state and type of home (FHA, VA, etc.). A foreclosure on your property can result in your eviction from your property and the sale of your home to recover the lender's cost.
  
  You may not be able to avoid foreclosure proceedings if circumstances loss of job, loss of income, divorce, death, injury, etc., force you into foreclosure.
  
  Please note these important points:
  
  
  1. Protect your credit rating
     
  2. Protect your home investment
     
     more information about foreclosure rights at our sister site: PickMyMortgage.com