Easy Ways to Trim your Mortgage Costs

Your mortgage payment is probably your largest monthly expenses.  It is a fact of life for most homeowners.

Does your mortgage bill feels like it’s crushing you? This guide will help you cut down your mortgage costs, and maybe even pay off your home more quickly in the process.

Add one extra payment each year

This is probably one of the easiest ways to save money on your mortgage. If you have some extra cash, be sure to make an extra payment every year. Mind you, extra payments are automatically credited towards your principal, rather than interest.

This will help you satisfy your loan more quickly, which means you’ll be paying less interest. In fact, it may even shave 5 years off a 30-year loan.

Get rid of your PMI

If you have bought your home with less than 20% down payment, chances are you might be paying private mortgage insurance (PMI).

The good news is, you don’t have to be stuck paying PMI forever. You are no longer required to pay for it once your mortgage balance falls below 80% of the home’s appraised value. Contact your lender to request for the cancellation of your insurance. Lenders do not drop PMI automatically.

Refinance your mortgage

Refinancing to a lower interest rate is one of the most common ways to save money on your mortgage. With rates at historic lows, this means that refinancing could reduce your monthly costs.

While this may help you save on interest payments and lower your monthly payment, you should understand that there are costs associated with refinancing like paying for the closing costs on the new loan.

If you are going to take this route, you have to make sure that you are going to save significant amount money so as to cover for the refinancing fees.