5 signs you’re paying too much for your mortgage
Americans all across the nation are dealing with mortgages with high interest rates, causing them to delve deeper into debt. After the real estate bubble burst, homeowners all across America have fallen into the mercy of high-interest banks as their properties were eaten up by the foreclosure market. Then the economic collapse didn’t help matters, leaving people jobless, broke and even deeper in debt. If you have one or more of the following signs in your financial situation, then it is likely that you are paying way too much for your mortgage loan:
1. Your interest rate is over 6%. Recently, mortgage loans have had record low interest rates, which means that you are definitely missing out if your loan has a higher than 6% rate. A lot of homeowners are being advised to refinance their loans, so that they can take advantage of the dropping mortgage rates, saving around $175 monthly afterward.
2. The interest rate on your mortgage loan recently climbed. This likely occurred because you have an adjustable rate mortgage, or ARM, which in definition is legally able to be adjusted with the rises and falls of the economy. Again, you can consider refinancing your loan and this time around, picking up a fixed rate mortgage, so that you can lock in the savings that you can witness.
3. Lots of late payment fees. If you’re having problems with making your mortgage payments on time, then there’s definitely a problem with the rate.
4. The other bills in your home aren’t being paid on time because all of your money is going towards your mortgage. Even if you’re making your home payments on time, if you’re not able to take care of the other financial obligations in your home, then this is a sure sign that you’re overpaying.
5. No financial cushion in sight. Every American should have a safety net of funds, so that you can be able to take care of financial needs in case you were to lose work or suffer a pay cut. Financial planners recommend that Americans have a six to twelve month savings that can cover your mortgage and other living expenses. If you’re unable to save enough to pay your mortgage for one month after losing work, then there’s a big problem with your financial situation.