Do you need help saving money on your mortgage? If you are like most Americans, you answered yes to this question. You live on a budget, you follow it as closely as possible, but your mortgage is probably the largest expense you have each month.
You can cut down on other costs, like dining out and entertainment but is it possible to save money on your mortgage? Here are five tips that you can apply to help save money on this large expense.
Do you need help saving money on your mortgage?
1. I know this tip is much easier said then done, but if possible try to make an extra payment each year. It can be tempting to splurge when you come across some extra cash, like getting your tax return, but it is extremely beneficial to pay because it will go towards the principal balance of your loan amount. The sooner you can make principal payments the more you will save on the lifetime interest of the loan. If you have a 30-year mortgage you could be taking years off of the life of the loan.
2. The property taxes that you pay on your home can be really expensive. If you have reason to believe that your property value has decreased in the past year, you can petition for a reassessment. If you lower your tax assessment, you will lower the amount of property taxes you pay each year. The amount that you can save all depends on how your property is reassessed. It may be just a little or it could be much more. Some people end up saving over $100 each month. It may seem like a small amount, but if you could save $100 a month that really adds up over the years.
3. Refinance your mortgage. You can refinance your home to lower your interest rate, which will in turn save you money in the long run. Refinancing is probably the most popular way that people save money on their mortgage. It’s well known among homeowners and it can be a budget saver for many. Be aware that there are additional fees involved with refinancing.
4. Round up all of your monthly payments. For example, if your monthly payment amount is $750 than round up and pay $800 each month. This may not seem like a way to save but every dollar extra going to your mortgage payment is helping to save you money in the long run. Depending on the terms of your loan, an extra $50 each month can cut a couple years off of the time your are paying your loan. It’s a case of a small sacrifice each month leading to a much larger payoff.
5. Shorten the length of your mortgage. Instead of a 30-year mortgage loan go for 15 years or even 10. Keep in mind, your monthly payment will be much higher, but in the long run it will save a lot of money in interest and you will own your home free and clear in a shorter amount of time.
Even though you may not see the benefits now, you will be happy that you made extra payments when you house is paid off much sooner than the term of the loan. Get started now by using these 5 tips to save money on your mortgage.
You can also check out How to Save Money for a Downpayment for your home.