Your American Dream includes owning your own home, but not just any home. You deserve a home that is free, clear, and all yours. Paying off your mortgage fast is doable but what if I told you that you could save money on your mortgage all around? You are making the biggest investment of your life and you want to do it wisely so that you get the most bang for your buck.
If you are just starting the buying process, you can save money on your mortgage.
As you prepare to buy a home, improve your credit. Building your credit can get you the best deal on your home and allow you time to build an emergency fund as well as a down payment for your new home.
While you are working on your credit, save a large down payment. The process can be time-consuming, and you may need your home right away, but it is a great way to gain more purchasing power so that you can negotiate better loan terms.
Shop around for the best terms on your home loan. It often seems that people are eager to get a pre-approval from the first lender they see. Jumping in head first can be a costly mistake. You can save money in the long run by buying a loan with a low interest rate. The pre-approval processis a great time to negotiate interest rates.
Save money on your mortgage if you already own your home
The good news is that you can still save on your home mortgage if you already own your home. Your best option is to work on paying your mortgage off fast to cut the amount of interest you will have to pay in the long run.
- Every year, make an extra payment.
- If you have any escrow account returns, invest them into your principal
- Invest your tax return into paying down the principal on your mortgage.
Your mortgage can be recast, allowing you to keep some more money each month and making your payment less expensive. If your goal is to keep more each month, then you should consider this option.
You might want to consider refinancing if your credit has been improving to get a lower interest rate than you qualify for when you started out? This will reduce your house’s long-term costs by allowing you to pay less interest later.
Reduce the cost of your mortgage insurance to save hundreds of dollars a year, by finding a new insurer. If you have proven to your lender that you are good about making your payments you may be able to negotiate to drop this extra cost from your payments altogether.
Comparison shop for the best homeowner’s insurance rates. Much like shopping for the best deal on auto insurance, you want to take the time to shop around for the best homeowners insurance rates. The monthly payment on your mortgage will be reduced as a result.