As a real estate agent and appraiser, I know that buying or selling a house can be a daunting task. But for most people, the biggest stressor is the mortgage. Mortgages can be a big financial burden, but there are some strategies you can use to save money over the long-term. Here are a few tips and tricks to help you save money on your mortgage:
Refinance your mortgage
Refinancing your mortgage can help you save a lot of money in the long run. Many people refinance to get a lower interest rate, which can save them thousands of dollars over the life of the loan. The rule of thumb is that if you can lower your interest rate by 1%, you should consider refinancing. However, it’s important to keep in mind that refinancing comes with some costs. You’ll need to pay closing costs, so make sure you do the math and determine whether the savings outweigh the costs.
Make extra payments
Making extra payments on your mortgage can help you save money in the long run. Even if you can’t afford to make a full extra payment each month, any amount you can add will help. By making extra payments, you’ll pay off the loan faster and reduce the amount of interest you pay over the life of the loan. It may not seem like a lot at first, but a little extra each month can add up over the years.
Switch to bi-weekly payments
Another option to consider is switching to bi-weekly payments instead of monthly payments. By doing this, you’ll end up making an extra payment each year. This can help you pay off your loan faster and reduce the amount of interest you pay over the life of the loan. It’s a simple change that can make a big difference in the long run.
Pay more upfront
When you take out a mortgage, you have the option to pay more upfront in the form of points. Points are fees you pay to your mortgage lender upfront in exchange for a lower interest rate. The more points you pay, the lower your interest rate will be. This can save you a lot of money over the life of the loan. However, it’s important to do the math and make sure that paying points is the right decision for you.
Take action today and start saving money on your mortgage by using our mortgage calculator. Refinancing, making extra payments, and paying attention to PMI are all great options you should consider to save money and become a homeowner faster. Remember, careful planning and smart choices are essential for a successful long-term strategy. Be consistent and strategic with your efforts, and you’ll enjoy the benefits of savings for years to come.