Saving money on your mortgage can be a great way to reduce your overall housing costs. With a little bit of effort and creativity, you can save hundreds – even thousands – of dollars on your mortgage every year. Here are some tips to get you started:
1. Make biweekly payments: Biweekly payments can save you thousands of dollars in interest over the life of the loan. Instead of making one payment a month, you can make a half-payment every two weeks. This adds up to one extra full payment each year, which can put a big dent in your principal balance and save you a lot of money in interest.
2. Refinance your loan: Refinancing your mortgage can be a great way to save money. If you can get a lower interest rate on your loan, you can save money on monthly payments and over the life of the loan. Be sure to shop around for the best deal and compare different lenders’ offers.
3. Make extra payments: Making extra payments on your mortgage can reduce your principal balance and save you a lot of money in the long run. Even just an extra $50 or $100 a month can make a big difference over the life of the loan.
4. Pay points: Paying points (or discount points) can reduce your interest rate and save you a lot of money over the life of the loan. This is a great option if you plan on staying in your home for a long period of time.
5. Use an escrow account: An escrow account is an account that your lender sets up to save money for taxes and insurance. This money is taken out of your monthly payment and put into the account. This can help you save money over the life of the loan by avoiding large lump-sum payments.
6. Get an adjustable-rate mortgage: An adjustable-rate mortgage (ARM) can save you money in the short term. With an ARM, your interest rate is lower at first, but can increase over time. This is a great option if you plan on moving or refinancing in a few years.
Saving money on your mortgage is possible with a little bit of effort and creativity. By following the tips above, you can save a lot of money on your mortgage and reduce your overall housing costs.