5 Tips for Homeowners Looking to Save on Their Mortgage
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Today we have a mortgage expert here to share some tips on how homeowners can save on their mortgage.
Purchasing a home may be one of the biggest financial decisions of a person’s life but it’s also one of the most rewarding and when it comes to your mortgage payments, there are several ways to save thousands of dollars in interest charges and cut years off the life of the loan. Whether you are a seasoned home owner or just beginning the process, the below tips will help you pay your mortgage balance faster.
Get Rid of Mortgage Insurance
If you have gained 20 percent equity in the house, either by paying down the principal or by having your home’s value rise, you can contact your lender and request to start the process of dropping your mortgage insurance. Some lenders may require an appraisal to determine the home’s value in order to drop the MI.
Challenge Your County’s Tax Assessment
A portion of your monthly payment may be going into an escrow account to cover yearly property taxes but if you believe that the value of your house has decreased, you have the option to petition your county’s assessor and ask for a review. The assessment may come back lower which could decrease your yearly property taxes.
Add One Extra Payment Each Year
By adding a thirteenth payment to your principal amount each year, you will cut years off the life of the loan. This will lower your overall balance and you will not have to pay interest each month on that principal payment for the remainder of the loan, saving you thousands. You can also do this by making payments every two weeks on your mortgage instead of making monthly payments.
Downsize Where You Live
Another option is to sell your current house and downsize to a smaller home or even move to a different, more affordable neighborhood. Doing this can reduce your monthly mortgage payments and may even eliminate mortgage insurance all together since your loan amount will be a smaller.
Round Up Your Monthly Payments
An affordable way to pay down your principal loan is to round up your monthly payment. For example, if your monthly mortgage payment is $1,550, round it up to $1,600 or even more if you have the means. This will take more time but overall will save you money. Another idea is to put your yearly tax return or bonus towards your principal loan amount. You might even be able to find a side hustle and put that extra money toward your mortgage too.
With these tips you’ll be able to pay off your mortgage in no time, saving your hundreds if not thousands of dollars in interest over the life of your mortgage loan.
Can you think of any other ways homeowners can save on their mortgage?
About the Author: David Zitting has been in the mortgage industry for more than 20 years and is the CEO and President of Primary Residential Mortgage, Inc. (PRMI) a nationwide, multibillion-dollar mortgage lender headquartered in Salt Lake City, Utah.
Photo courtesy of: Wdnet
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