Save money on your mortgage
If you find it difficult to take out a mortgage from a bank, you could always contact a mortgage broker. The loan applicants who do not have near-perfect credit history can seek help from mortgage brokers. They would assist you in arranging necessary funds for financing your home after retirement.
Mortgage brokers have tie-ups with reputed money lenders and will help you get a better interest rate. These mortgage brokers are likely to charge a certain amount of fees for their services. Before you enter into a deal, make it a point to inquire about the charges of the mortgage broker.
How CAn you Save Money on your Mortgage?
You could adopt the following methods to save money on your mortgage:
- Seller concession
- Take over an existing mortgage
- Seller financing
Seller concession helps in saving money on mortgages. Once the final price for the home is mutually decided upon, you could ask the seller to give a concession over the agreed price. The concession value gets added to the price of the home and you will have to pay the additional amount. But the seller will return the extra money at the time of sale.
You could use the returned money to pay for closing costs like points, title search, and recording fees. How does this help you save money on your mortgage? The answer is quite simple. Closing costs are not tax-deductible, but mortgage interest is! Using this simple process, you can ensure that the closing costs become tax write-offs.
Take over an Existing Mortgage
You could also opt for assumption of an existing mortgage on a house. Through this method, you could get a lower interest rate compared to the current market rate for home mortgage loans. Another benefit lies in the reduction of extra costs involved in the process of taking out a new mortgage loan. The existing mortgage loan has to be transferable for you to assume it.
In this case you are not required to take out a mortgage loan from any bank or lender. The entire money is paid to the seller over a certain period of time. A seller mortgage is likely to get you a lower interest rate compared to bank mortgage loans. You can also do away with mortgage insurance and administrative costs involved in taking out a bank mortgage. Usually a seller agrees to this form of payment when the individual finds it difficult to sell the house or wants to ensure a regular source of income without having to worry about capital gains tax.
There are various, other interesting methods that you could use for saving money on mortgages taken out for financing your home after retirement. For example, you could pay down the principal amount to your mortgage firm. That will help you to reduce the amount of money which you are required to pay as interest payments.
You could also enter into negotiations with your mortgage firm in order to try and reduce the interest rates, which they charge. If you can take care of at least 20% of the cost involved in financing your home after retirement, you do not have to worry about mortgage insurance payments.