Skip to main content

Mortgage Loan Repayment-How Tracking It Can Save You a Fortune

When you take out a mortgage, it is helpful to keep close track of your repayments and interest rate changes from time to time. Just the same way you track the price change on the stock exchange after buying shares. Any change, positive or otherwise, is worth an action.

To eventually become a homeowner, you should review your mortgage repayments when there is a big change such as a new job, interest rate fluctuation, when you get a big lump sum or a pay raise, or just once in a year. These checks should help you determine a number of issues to assist in freeing you obligation on time or early. they should help you answer such questions as to whether you are still making mortgage payments that are bigger than you can comfortably afford. Whether you can put in more cash to reduce your balance or whether you should call it quits before it is too late.

The economic sense of this checks is seen when the answers to the above questions are put to their financial advantage. Like the realization that putting in more cash toward mortgage repayments is a much better deal financially than cash put into a savings scheme. Putting money towards your mortgage provides the equivalent risk-free return of a savings account, which pays an after-tax interest rate the same as your home loan.

Put in another way, if your mortgage rate is 16 per cent, putting money into a savings account only makes sense if you can find a no-risk account that pays more than 16 % after tax.

Even by boosting your repayments by as little as $ 10 per month may save you thousands in interest repayment and release you from mortgage obligations months or even years earlier. sometimes changing the structure of your mortgage could save you money. You might decide to switch your loan from a variable rate to a cheaper fixed one, for example, or you might transfer your mortgage to another lender altogether.

Be careful, though. You'll need to look at the costs and the possible savings. Your lender will definitely require you to pay up fee before switching from one type of loan to another. The most common being the early repayment fees if your loan is on a fixed interest rate; the application fee a new lender might charge; a legal fee for perfecting new security documents and possibly a valuation fee. But the advantage of  moving to a lower rate-paying scheme may out-weigh all these costs.

If you find that you are having trouble making ends meet, the first advise is for you to put up a budget to determine where your money is going. See what you can cut down in your list of expenditure.

But if you think you will miss a mortgage payment, most lenders advise that you get in touch with them quickly. Together you can salvage a rather desperate situation. And the options are numerous. You might agree that you just pay the interest on the loan for a few months until you get your finances back on track. Some lenders offer a 'Rent Agreement' where you are allowed to pay a fixed installment to cover interest and other fees for say 12 or 24 months and in return the company freezes interest computation on you account. This comes in handy where you have had an emergency or lost your job.

If there is no way you can keep the mortgage going, you may decide to call it a day and agree with the lender to have the home auctioned to recover debt. This is where your close attention is called upon.

The more you delay to accept the reality, the more the debt accumulates and, before long, you find yourself with a 'negative equity', where the money you owe is more than the home is worth. If on sale of the property there's not enough money to repay the mortgage, the bank may decide to claim any money you hold in other accounts. This is possible, where in your contract you had agreed to the lender's right to consolidate your accounts.

The lender may also take action to get the rest of the money from you. Civil jail may also be a nose away from you. The lender can also pursue any guarantor for the loan. All this can be avoided or be taken care through constant check on your mortgage loan status.


  1. It was very useful for me. Keep sharing such ideas in the future as well. This was actually what I was looking for, and I am glad to came here! Thanks for sharing the such information with us

    reverse mortgage


Post a Comment

Popular posts from this blog

How to Verify Your Land Title Deed is Genuine

Cases of forged title deeds are on the increase. Therefore, people are losing money to con men as they are taken advantage of due to their ignorance regarding land transaction matters. While thinking of owning land, it is vital to be aware of how you can verify a title deed before investing your hard earned cash.

As you plan to commit your money to buy and construct your dream home, verify that, the seller is the genuine owner, the land exists and is free from restrictions. Also be sure that you are not buying land on a road or railway reserve and above all, that the title deed is genuine.

How farmers can double their bean yield production

"As Jack slept, the beans germinated in the soil, and by morning a big beanstalk grew in their place. When Jack saw the great beanstalk, he immediately decided to climb..." This is a classic scenario of 'Jack and the Beanstalk' fairy tale. The same is true for Kenya's bean variety that climbs and spreads on sticks producing double the yield of local varieties.

Due to subdivision of land in Kenya, farmers are not able to produce enough beans to feed the 38.6 million people living in Kenya.This is mainly due to shrinking land sizes. This is the reason why high yielding varieties of beans that only need a small area to grow has been developed. These new varieties of beans require support with stakes (sticks) to climb on when they are growing.

The beans can grow up to a height of 3.5 meters. The long stems of this variety of beans enable it to produce more pods as compared to the normal bean varieties (bush bean).   With good management climbing beans can produce u…

Herbal Plants used for Alternative Medicine with no side effect

In a sad note, most indigenous informants keep herbal knowledge, especially the actual preparation methods, strictly secret. Luckily, an aged medicine man from Gatundu in Central Kenya, whose great knowledge of medicinal plants facilitated the write-up of this article.
In part one of this article, plants are grouped according to their medicinal use. According to the aged medicine man, simply boil the leaves, roots or the bark; add honey or milk or soup to sweeten the concoction. He recommends taking a glass in the morning and in the evening for preventive measures. 
He cautions on their medicinal uses which should be considered as neither preparation methods nor dosage prescription are provided. This is a topic that would require much more time and I have decided to leave it for part two of this article.
Best Herbal Plants for alternative Medicine with no side effects

I have grouped their medicinal uses in three parts which are,       Alternative medicine for preventive measuresHerbal …