Rents are paid in advance and mortgages are paid in arrears. If you are buying a home, your first payment is not due until the 1st of the month after you've owned the house for one month. For example: if you close on June 20th, your first payment will be August 1st. It feels like getting a month free.
Mortgage payments are due on the 1st and late on the 15th. That doesn't mean you should wait until the 12th to send in your payment. To insure the highest credit rating, make sure your payments are in by the 1st.
To pay down your mortgage quicker, you may add $50 or more to each payment but be sure to write a separate check and mark it to be "applied to the principal. " The rule is that if you add $50 with each payment, you'll pay off your loan 15 years sooner saving a lot of money on interest.
Your mortgage company may offer a program that allows you to divide the payment in half and pay twice a month to pay down the loan fast. They charge small processing fees but you don't have to pay them extra fees and you can pay down faster at your own pace by using the method in the paragraph above.
First time home buyers: Did you know that the interest on the loan and the property taxes are tax deductible! Since most of your payment in the first 5 years is interest, that's a huge savings.
FOR A FREE COMPARATIVE MARKET ANALYSIS ON YOUR AUSTIN AREA HOME, CALL ROBIN AT 512.589.7988 OR EMAIL:robin@robinscottrealtor.com
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Buying or selling? Hire an experienced professional. Call Robin Scott, Broker at 512.589.7988.
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