Usually the mortgage payment is the largest monthly expense, especially in California. After we receive the loan and begin making payments, we forget there are opportunities to cut costs. With a little effort we can all reduce our expenses. This is the first in a series on how to reduce your mortgage costs.
Mortgage tips to consider:
- Refinancing when current rates are lower than your rate by .50% or more.
- Refinance from a 30 year loan into a 15 year fixed, thereby saving money on the total amount paid on your mortgage.
- Increase your credit score prior to refinancing or applying for a home loan, thereby qualifying for the best or lowest rate and fees possible.
- Compare mortgage lenders rates and fees when applying for a home loan. See my tips on a future blog.
- Pay additional money towards principal balance, thereby decreasing the total loan balance and subsequent date when balance is paid-in-full.
- Pay 1/2 payment 15 days before it is due and the remainder on the due date, which decreases the overall balance paid over time.
- Drop monthly mortgage insurance coverage(MI or PMI), if it was originally required on your loan.
- Fight property assessment valuation by the state. (This saves money on taxes)
- Shop for lower priced home owners insurance.
- Recast your mortgage payment.
- Loan modification.
Fees and guidelines vary by lender, program, loan amount, loan-to-value(LTV), credit score, state, fixed rate loan versus adjustable, etc.