Secrets you should know to pay less interest on your mortgage
Who doesn’t like to pay less? Saving some money is always well received, since it can be used to pay debts, buy something that was needed at home or just not be so tight during the month. Given all this, you will undoubtedly be happy to know that we bring you some ways in which you can save on the payment of your mortgage loan.
Whether you are paying your mortgage or are planning to apply for it in these months, these tips will be of great help because they will show you what tools or tactics to use so that interest payable is reduced. And it is that in a long-term loan such as housing (canceling it usually takes between twenty to thirty years), some small change in the rate has a negligible impact and translates into saving a good amount of euros.
So what can you do to generate savings on your mortgage payment? Quiet, because it is not a magic trick or extreme act. Take note!
1. Transfer your mortgage
A mortgage transfer? So is. This implies the portability of your mortgage debt to another bank. How can it help you pay less interest? Something you should keep in mind is that the market is constantly changing and the rates that were the best six months ago are likely to be improved by other entities. So, if you are a good customer and have made payments on time, any financial institution would be happy to move your mortgage under its wings.
This will allow you to negotiate a new interest rate, which will result in the money savings we are looking for. Is there a limit of times you can do it? No, that is totally up to the user’s awareness, but it is always advisable to evaluate what they offer you and even give your current bank the opportunity to respond, as sometimes they tend to surprise you with even a better deal.
2. Acquire insurance outside the bank
Mortgages come with some insurance that are mandatory, however, it is not mandatory that you should have them with the financial entity that issues it. You can consult about external options that may be cheaper, this will also have an effect on the fee and the interest payable. The recommendation is that before performing any action, perform the calculations carefully in order to have the real numbers and be sure that it will not involve an additional expense.
3. Reduce the term of the mortgage
An additional way to reduce interest has to do with reducing the term of the mortgage loan. If you financed it for 20 years, it means that you will pay 20 years of interest. The less time you have the credit, you will pay a smaller amount. Of course, this causes the monthly fee to rise, so it is necessary to find a balance.
It is worth reviewing this point because in all the years that the credit lasts it is very likely that your working or financial conditions change, especially for the better, which will allow you to be in a position to make larger payments and thus have everything you need to reduce The term of your credit.
4. Maintain a good credit history
While this is good when applying for any type of credit, it can also help you reduce the interest on your mortgage. The bank takes your financial profile into account when assigning interest rates; So, if you are about to request one and present a good behavior, this will help to make the conditions offered to you even more attractive.
If you already have a credit, calm down! Because you can still take advantage of this point, since, when requesting the transfer of your credit to another entity, they will have to evaluate your profile. Many things change over time and working to improve your financial history is something that will certainly help you generate savings with your mortgage.