Taking Care of Your Mortgage
Getting the right mortgage for you is a major milestone in your financial success. Well done! Now it’s time to manage your new financial obligation wisely. Here are a few pointers that will help you do just that.
· Make sure you have the loan payment address: You should have received this address when you closed on your loan. You may have received your first payment coupon at the closing table. Whether you did or not, you’re still responsible for making your payments on time. If you don’t have the address, contact your loan servicer for all the payment details for your new mortgage.
· Watch your mail for a notification that your loan servicer has changed: It’s very common practice for your new mortgage to be sold shortly after loan closing. If this happens, you’ll receive a letter from your original mortgage lender with all the details, including where to mail your monthly payments going forward.
· Be on the lookout for tax and insurance bills: If you have an escrow account, your loan servicer will be collecting your property tax and homeowner’s insurance payments each month (both are part of your monthly mortgage payment). The mortgage servicer is then responsible for making your property tax and homeowner’s insurance payments on time so you don’t have to think about it. However, it’s possible that you may receive a tax or insurance bill yourself. If you do, simply forward it to your mortgage servicer.
· Be prepared for rising property tax and/or homeowner’s insurance premiums: If either one increases, that will also raise your monthly mortgage payment, because your servicer will need to collect a greater amount each month to cover the tax or insurance bill when it’s due. You’ll receive a year-end statement from your servicer, which will detail the total amounts collected and paid. You’ll want to give this statement to your tax preparer, so you can take any deductions that you’re eligible for (ask your tax adviser for details).
· Make your payments on time: Maintaining a healthy credit history is key if you want to obtain a home equity loan or credit line down the road – or for that matter, a new mortgage. So it’s important to make every mortgage payment by its due date. It’s so vital to your credit score that you’ll always want to budget for and pay your mortgage first, before any other debt obligations.
· If you get behind in your payments, contact your servicer right away: If you have a financial hardship, such as losing a job or major medical bills, let your servicer know so that you can both plan on how to get your monthly payments back on track.