How Do I Choose the Best Mortgage Reduction Program?

Alex Newth

A mortgage reduction program is designed to reduce the overall cost of a homeowner’s mortgage. These programs are aimed at making a general, 30-year loan last only from 15 to 20 years, saving the homeowner substantial money over the course of the loan. Companies that offer such programs frequently offer different ways to reduce a mortgage, though some are more viable than others and some are more about making money for the company than saving money for the homeowner. Picking the best program requires considering how long it will take to join the program, how much money will actually be saved, and how any fees or hidden costs will affect the savings.

A house with a mortgage.
A house with a mortgage.

The first consideration when trying to pick the best mortgage reduction program is how long it will take the mortgage reduction company to figure out your savings and to implement the reduction plan. The general time is from 30 to 45 days, but it could take less time or more, depending on the company. Ask the company’s representative about this issue to see when the savings will begin to accrue. If the process takes longer than promised, you have to decide if the delay is reasonable or an indication of the potential for other broken promises.

Some companies will exaggerate savings by adding together interest and payment savings; they may even multiply them in some way to make the savings look more significant so customers will feel compelled to enter their mortgage reduction program. Savings on mortgages should never be calculated by tallying two different versions of savings and adding them together. A legitimate mortgage reduction program representative will be able to show you exactly where the money is saved.

You also should find out about fees and any hidden costs. Fees for a mortgage reduction program are usually paid once a month. You should also determine what the company is offering in exchange for the fees. If there are no special services, then there is no reason to pay any fees, because many mortgage reduction plans can be utilized by a homeowner simply by paying the mortgage twice a month instead of once.

Next, ask the seller if there is a way to cancel services at any time. Find out about contract times and whether you can cancel before the mortgage is up. If the savings from the mortgage reduction program are not what the homeowner thought they would be, or if the homeowner finds a better service, he or she should be able to cancel services at any time.

Talk to the program representative about his or her qualifications. Without qualifications, you are right to question whether the company is really able to offer any legitimate advice on savings. Qualifications also improve trust, showing the company knows what it is talking about.

If a homeowner is having financial difficulties, some mortgage reduction program companies will make the mortgage payments for a set amount of time, while other companies will drop the homeowner immediately. Find out if the program has written policies about this. Also find out if there are any fees associated with the company paying the mortgage when the homeowner cannot offer any money.

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