See what our experts say are the most important tips to save money that everyone needs to know.
Seek Professional Assistance With Your Closing
One of the easiest ways to save money on your mortgage is to seek a professional to help ensure lower closing costs. A licensed mortgage broker can help you understand all of the mortgage process. Having this information upfront could help in negotiations with lenders, which saves you money long-term.
Look for No-Closing Cost Loans
Yet another way to save money, is to try for a loan program that offer no closing costs. Many lenders have special offers available that waive fees associated with closing. While other promotions may give customers a rebate of some sort to offset closing costs. These can provide a lot of savings for borrowers.
Make sure to shop around and compare different home loans available. There are a variety of loan programs with varying interest rates that can save you money in the long run. Consider all your options before committing to a loan, as taking some time to do research could save you hundreds
Make 1 Bonus Payment Each Year
Making an extra payment every year can lower the amount of interest you pay over the life of your loan. By making one extra loan payment every 12 months, you can save thousands of dollars in interest. Ideally, this will also significantly shorten your loan repayment period.
Take Advantage of Free Financial Resources
Take advantage of the many free financial resources available in your community. Most cities and towns have programs that help homeowners with their home loans. They offer help in deciding between loan options. The programs also help you understand closing costs. And some even help with finding grants or subsidies to help lower your mortgage payments. Consulting these services may be a great way to save money on your mortgage.
Get Rid of Your PMI
Private mortgage insurance (PMI) is required if you make a down payment less than 20% when buying a home. This insurance can add be a few hundred dollars a month. However, if the value of your home has increased since you purchased it and now exceeds 80% of its original purchase price, you may be able to have the PMI removed from your account immediately. This can help you save money in the long run and lower your monthly payments.
Take Advantage of Tax Benefits
If you’re buying a home, make sure to take advantage of tax benefits available to you. Home ownership comes with several tax deductions that can lower your taxable income. These include deductions for interest paid on your mortgage, points paid at closing and property taxes. You can also deduct certain home improvement costs from your taxes if you spend money to make energy-efficient upgrades to the home. Taking advantage of these deductions can save you thousands of dollars each year.
Reset Your Loan (Every Few Years)
Some lenders offer loan reset programs that allow you to refinance your mortgage every few years at a lower interest rate. This can help you save money on both the principal and interest of your loan, as well as reducing the length of the loan repayment period. These loan reset programs are often only available to select borrowers,
Refinance (Your Loan/Mortgage)
Refinancing your loan can also help you save money. By refinancing, borrowers can lock in lower interest rates and reduce their monthly payments. This option is especially beneficial for those who have gained equity in the property since they purchased it, as they may be able to refinance at a much lower rate than their original loan agreement. This mostly works in scenarios where the national interest rate is going on. For example, those who got locked into their interest rates around 2018-2019 might not benefit from any mortgage refinancing.
Use Online Closing Services
Using online closing services can help you save money on your mortgage. These services provide borrowers with an opportunity to close their loan electronically and avoid many of the fees associated with traditional loan closing processes. It also makes avoiding errors easier and less frequent. Additionally, some lenders may even offer discounts to those who use online closing services when purchasing a home.
Use Automated Payments
By setting up automated payments for your mortgage, you can ensure that your loan is paid on time each month. This will help to avoid late fees and penalties from your lender. Additionally, many lenders offer discounts to those who use automated payments, which can save borrowers a significant amount of money over the life of their loan.
Mortgage Down Payment Tips
Making a large down payment can help you save money on your mortgage. A larger down payment means that you owe less and typically qualify for lower interest rates. While lenders generally require a minimum down payment of 20%, consider saving up extra funds to make a larger down payment if possible. This can save hundreds of dollars in the long run.