Simple ways to cut mortgage costs
- Details
- Published on Thursday, June 14, 2018
Metro Creative Connection
Monthly mortgage payments are the biggest single expense for many homeowners. So it鈥檚 understandable why plenty of homeowners would love to trim those costs.
A host of factors determine how much homeowners pay for their mortgages each month. The cost of the home, the amount of the initial down payment and property taxes, which are often folded into monthly payments, will factor heavily into the cost of home ownership. While homeowners may feel as though there鈥檚 little wiggle room to cut the costs of their mortgages, there are several ways to do just that and potentially trim years from the life of a home loan.
鈥�Make bi-weekly payments. Making bi-weekly instead of once-a-month payments can save homeowners substantial amounts of money. A year鈥檚 worth of once-a-month payments equates to 12 payments per year. But homeowners who pay on a bi-weekly basis will make 26 half payments, or 13 full payments, per year. That extra annual payment can be applied directly to the principal, dramatically reducing how much homeowners pay in interest over the life of their loans.
鈥top paying PMI. 水果视频owners whose initial down payments are less than 20 percent of the sale price will have to pay private mortgage insurance, or PMI. But once the balances on such mortgages falls below 80 percent, homeowners can cancel such insurance. 水果视频owners may also be able to stop paying PMI by having their homes reappraised.
鈥efinance the loan. Refinancing a loan also can save homeowners substantial amounts of money each month. 水果视频owners are typically eligible for lower interest rates when refinancing their loans, meaning they will pay less in interest each month. However, refinancing is not free, so homeowners should first check the going home interest rates and examine their credit scores to see if the interest rate they鈥檙e likely to get upon refinancing will save them money. The cost of refinancing might be more than homeowners can save.
鈥equest a tax reassessment. Real estate values increase and decrease, and homeowners who feel their homes have decreased in value can request that their homes be reassessed. 水果视频owners whose homes are assessed at a value lower than the current value can expect to pay less each month in taxes.
水果视频owners hoping to cut mortgage costs have various options at their disposal.
