Managing Your Mortgage

Good practices for homeowners

For many Americans who have a mortgage, their house is their primary investment. And just as a home requires routine inspection and maintenance, so does a home mortgage. Here are ways to manage a mortgage and protect your investment in good times and bad.

For anyone with a mortgage

Stick to a system for making your mortgage payments on time. Failing to keep current with your payments can be costly in terms of late fees and lower credit scores, which could translate into higher costs when you go to borrow money or purchase insurance.

The easiest solution may be to set up an automatic payment plan from your bank account to your mortgage each month. You can then rest assured knowing that your mortgage payment will be made on time without you having to remember to do something.

Save receipts, save money on taxes. You may qualify for tax deductions for certain home improvements, such as energy-efficient windows and appliances, or various costs associated with a home sale, a mortgage refinancing or converting a primary home into an investment property. Consult a tax advisor regarding tax deductibility.

Build a rainy-day fund. The idea is to have savings you can tap, if times get tough, to make as many as six mortgage payments plus your property tax payments.

If paying your mortgage hasn't been a problem


Consider paying off your loan faster. You may be able to lower your total borrowing cost by refinancing your mortgage at a lower interest rate or a shorter term (for example, from a 30-year to a 15-year mortgage). There are also other ways to save money on your existing mortgage, without refinancing.

By adding a little more money to your monthly payment or sending all or part of your payment in sooner than you're scheduled to, you can repay your loan faster and cut your total interest costs by thousands of dollars over the life of the loan. You might also send an additional (13th) mortgage payment each year instead of 12. Be sure to note that the extra payment is to be applied toward principal.

If you're struggling to pay your mortgage

At the first sign of trouble, ask for help. If you find yourself about to fall behind on your mortgage payment, perhaps the most important thing you can do is to talk to your mortgage company while there's still time to turn things around with their help. They have as much interest as you do in finding an early solution and may offer payment recovery options.

Also be on guard against loan modification scams. More information is available on the FDIC website or at

For more tips from the federal government, visit and click on Dealing with Mortgages