We are always trying to find ways to save money. We shop sales at the local department stores, use coupons at the local grocery store, and eat early bird dinners with the whole family. There are many small things you can do to save money in your daily life that can keep the expenses to a minimum, allowing more money to save, put towards an investment, or towards a family vacation that is long over due!
Many people do not think about saving money on their mortgage however, and often just leave it as “it is what it is.” To be honest, this is silly because things can be changed on your mortgage that can save a home owner money. This is especially true if you pay your monthly payment on time and are not delinquent on any payments. Why not try to save money on your mortgage too?
The first way you can save money on your mortgage is for those that may have not had a 20% down payment when the property was bought. Many people take advantage of little to no down financing in order to get in a home, in exchange for a higher interest rate and Private Mortgage Insurance. Many mortgage lenders require this Private Mortgage Insurance as an extra security for the increased risk of not having a large enough down payment toward the home.
Private Mortgage Insurance can literally cost a home owner thousand of dollars more than without. Usually there is a time when the Private Mortgage Insurance will be released, and that is often up to the mortgage lender and how it was determined in the contract. However, if you have continued to pay your monthly payment on time, and have built some equity in the home, then consider speaking with your lender, build your case and see if you can not save yourself thousands of dollars by having the Private Mortgage Insurance removed from your account. You will be pleased.
The second way to save money on your mortgage is to consider bi-weekly payments. With bi-weekly payments, you take what would be your monthly payment, cut it in half, and pay it every two weeks. You will end up making two extra payments a month, as well as saving thousands of dollars in interest! What happens is you pay your principal down faster and usually only one payment per every two weeks includes interest on it. You can build equity in your home more quickly as well as save money on interest.
The third best way to save money on your mortgage is to refinance. By refinancing, you can decrease the term of the loan and save a lot of money on interest, as well as own your home sooner. If you bought when interest rates were high, you can opt for a lower interest rate. If you have an adjustable rate mortgage with high or no caps, consider getting a fixed rate loan or lower caps that will protect you from having too high of monthly payments if interest rates spike. If your home has increased in value, then refinancing may just what you need to get a better mortgage.
As you can see, there are many ways to save on your mortgage! Speak to your financial advisor or mortgage lender to get creative and find ways to save you money on your mortgage. Use these tips as guidelines and see where else you may find money saving pockets!
John R Blakefield is a mortgage and real estate specialist. For more information, articles, news, tools and valuable resources on home mortgages or investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/.
