Are you trying to save money on your mortgage?
Saving money on your mortgage does not end once you close on your mortgage. While the blessing of a 30-year loan is the fact that the interest rate and mortgage loan amount are fixed, there are still other variables that allow your payment to increase or decrease over time. This is why it is important to continue to evaluate your mortgage every year or so. By evaluating your mortgage every year, you are capturing all the ways to save money on your mortgage. These savings add up to a dramatic savings over time.
2 Tips to Save Money on Your Variable Costs
Your insurance and taxes are variable rates – they change based on your house's price. Even though the rate of your house stays the same, the amount that you owe decreases every month as you pay the principle down. The lower your taxes and insurance, the lower your monthly payment will be.
1. Evaluate your taxes. Most lenders will pay your taxes directly as part of your escrow, allowing it to be easy to forget about the value. Check your taxes to make sure you are being billed for the correct amount. If your state provides a homeowners exception for living in the house, make sure you are receiving that exception.
2. Shop around for insurance. Insurance companies pricing will change. Some insurance companies are cheaper in one area than they are in others. Make sure you are getting the best price for your area. Also, make sure you are bundling your insurance products (car insurance, homeowners insurance, etc.) to get the best price.
Once you have increased your savings on the variable expenses, now it is time to evaluate your fixed expenses.
4 Tips to Save Money on Your Fixed Expenses
1. Are you paying the correct amount on your mortgage? Double checking that you are paying the correct amount on your mortgage is very easy. Simply check your online statements and the amount that is coming out of your bank account. It is very easy to be over paying on your mortgage without even realizing it if your statement went down or up. It is also important to check in case you had added additional escrow or mortgage funds at one point or another.
2. Evaluate a refinance. Today's refinance rates are at an all time low. Depending on when you purchased your home, a refinance could allow you to save thousands a year through some simple paperwork.
3. Did your PMI correctly fall off? Many loans with down payments under 20 percent have PMI. Some loan's PMI falls off after 22 percent. The key is to call your mortgage company to make sure that your PMI falls off when it should.
4. Pay every two weeks. If you pay your mortgage every two weeks, you could shave years off your loan. Use our mortgage calculator to see what how many years and thousands of dollars you could save.
By following these tips, you could save thousands of dollars over the life of your mortgage loan.