Wallet Wednesday: Being money smart with your mortgage

KNOXVILLE, Tenn. (WVLT)- When you look at your monthly bills, one of the biggest are usually our mortgages. We talked to an expert at SouthEast Bank about what you can do to lower that number.

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Jackie Windham is the senior vice president of mortgage lending at SouthEast Bank, "When you're looking to refinance, it's really looking at the customers financial picture. What their future goals are to determine the best route for them."

While refinancing seems to be a good idea it's not always your best option. "We really look at a benefit to them. Typically we want them to save at least 100 dollars per month in order to make it worth their while because there will be closing costs involved. To calculate what that would be let's say for example the closing costs were going to be 3,000 dollars and you're going to save 100 dollars per month. Well, if you divide that out, that's 30 months to re-coop that cost so that's okay," said Windham, "but if it goes to 5 years then it starts not being such a good idea."

"What most people don't think about is that there are other ways you can really shorten the term of your loan with the mortgage you currently have. One of those is to simply make an additional payment so maybe make an additional $50 or $100 per month so you're going to start reducing the amount of your term. A super easy way is to make one extra payment per year so you can do that every other week," said Windham. If you start at the beginning of your mortgage she says you'll cut about seven years off your mortgage. "If you put that money away for your mortgage, you're not going to spend it. You're not going to think about it, but you're doing something good."

She also had some advice for new home buyers. "'Oh, I have to have 20 percent to have a home.' That's not true -- you can have loans as high as 97 percent so three percent down." Windham says anything over 80 percent will come with a required mortgage insurance.

She says whether you're a first time home buyer or looking to move into your second or third house -- having a conversation about your options with a professional is recommended.

"Truly find someone who is going to sit down with you, have a conversation with you, find out what your goals are and then develop a plan."