Some people decide to pay a monthly sum above the mortgage payment. This amount gets applied to principal (not the interest), and doing so consistently can save you a small fortune in the long run. Another way of reducing interest is through a system of making 13 payments in a year instead of 12. This is part of shopping for a mortgage. Some mortgages have a flexible policy, which allows you to make extra payments as you consider fit and without restrictions. In other cases, however, the terms of overpaying a loan are strict and require a penalty for those who are planning on prepaying the mortgage. These terms are detailed in the prepayment penalty disclosure section of the documents. Be sure to examine the documents carefully.
THINGS THAT CAN DISRUPT YOUR DEAL
Until the closing statement is signed by both you and the seller, nothing is certain. The deal might fall apart from one day to another. Here’s a list of common mistakes that may seem insignificant for the buyer at the first glance, but for the lender may mean a “yes” or a “no.” Be careful with other big purchases while trying to obtain a mortgage. Avoid charging your credit cards with thousands of dollars for unnecessary things. Buying furniture or opening a new line of credit may threaten the deal, as the lender may suspect that you’re cutting funds reserved for the real estate payment. It Is highly important to act responsibly and turn in all the required paperwork on time. Ensure you have enough time to review the closing statement; don’t be the reason the signing is delayed.
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