Mortgages are acquired daily, but there are a few questions that everyone, regardless of the size of the mortgage they are seeking, asks regularly. Here are the answers.
1. How do I calculate a mortgage payment? Unfortunately, there is no simple formula for calculating monthly payments. It is most effective to use an online mortgage calculator or a loan calculator. Booklets of payment calculation tables are also available from many banks. In order to successfully calculate a payment you will need to know the number of years on the mortgage, the interest rate and the amount of money borrowed after the down payment has been paid.
2. How can I pay off a mortgage quickly? The quickest way, if it is affordable, is to drop a 30 or 40 year mortgage down to a 15 or 20 year. This will speed up repayment and save money on interest. Another option is to make extra payments. Before doing this, make sure your loan does not have a pre-payment penalty. Making payments bi-weekly rather than monthly will significantly decrease the amount of time it takes to pay the mortgage off and the amount of interest paid.
3. I just found my mortgage in my car visor, and it was due last week, what do I do? The first thing you need to do is alert your lender. Most lenders are willing to work with you if they know you made an error or forgot. You may be assessed a late fee after 15 to 30 days, depending on the lender. Once you are 30 days late, you will receive a notice in the mail. You will receive a second notice at 60 days. If the lender is aware of your situation, the late fee may be waived. The best course of action is to contact the lender as soon as you know you will be late with your payment – regardless the reason.