No one wants to spend more for their monthly mortgage payment than they have to. This is already a major cost each month and when you factor in the amount to pay back the loan, any PMI, the insurance, and the taxes, the number can be large.
Many homeowners are going to look for ways to lower their monthly mortgage payment. This is something that takes a little time to get done, but there are a few steps that you are able to take in order to lower that payment while still enjoying the home that you love. Some of the ways that you can cut down your monthly mortgage payment costs include:
Shop Around for Insurance
Many homeowners are paying too much for home insurance. If you have a mortgage, you need to have homeowners insurance on the property to provide protection in case something does go wrong. There may even be some requirements for the type and amount of insurance you will need in order to make the mortgage happy.
That still leaves you free to shop around and see what options there are for different types of insurance based on the company you decide to use. Shopping around will help you to compare some prices and see whether there are better options out there. And that amount can change how much you owe on the mortgage payment each month.
The first thing to do is pull out the original insurance policy that you have. You need to know for certain how much you are paying on the insurance and what coverage you have. You want to make sure that your insurance coverage is at least the same, if not better, as what you have on the current policy.
Armed with that information, you will be able to call up some insurance companies, or look at their website online, and see what they are able to offer. Some companies will charge more than what you are already paying, but some may offer less or offer better coverage. It never hurts to look around.
Once you have shopped around for insurance and found a new policy that you like, you can choose that one. They can work with your mortgage to receive the right payments and you will notice that your monthly amount will go down automatically.
Refinance to a Lower Interest Rate
Some homeowners will find that doing a refinance is a good way to save some money. They may be able to get a better rate when they do a refinance of their home, making it a smart decision for many.
You will need to shop around a little bit to find the best rate. You are allowed to check out a few banks to see who is able to offer you the best rate along the way. The lower the rate and closing costs you are able to get, the more it will be able to save you.
Before refinancing, keep in mind that there are going to be closing costs for you to deal with as well. You will need to do some of the calculations to figure out how long it will take you to break even, or how long until you have actually started to save compared to keeping your current rate on the mortgage.
The larger the decrease on the interest rate, and the lower the closing costs, the more refinancing is worth it. You can check with different lenders to see what rates they are going to provide you and then figure out whether now is the time to do a refinance on the home or not.
Getting Rid of Your PMI?
Your PMI could be a factor that makes your mortgage payment a little higher. If you did not pay 20% upfront to the mortgage when you bought the house, then you will have PMI on the amount that you pay each month. Some banks keep this low and some have it higher, but it is still extra money that you have to pay each month.
There are several ways to get this amount knocked off. The first one is to pay down the mortgage amount. All mortgages will PMI have it drop off when you reach 78% loan value. When you have paid off 22% of the loan, the mortgage will automatically take off the PMI. You can pay extra payments on the mortgage and get it paid down faster.
Another option can work if your home value has gone up quite a bit. You will need an appraiser to help prove that your home value has gone up enough. If your home value has gone up enough, then you will be able to show that to the mortgage company and they may agree to take the PMI off.
This does take a little extra work on your part, but when you are successful with it, you will find that it can take $100 or more off each month, allowing you a way to pay the mortgage off faster or use that money for other things. Many homeowners choose to put that money into the mortgage to pay it down faster.
Getting Your Mortgage Payment Down
Many homeowners are interested in finding ways to cut down on their mortgage payments. This can then give them money to pay down their mortgage faster or free up that money so they can use it on some of the other items that they want. While the best option is to keep the costs low when you first take out the mortgage, there are options if you already own the home too.
The more you can save on your mortgage, the better you will be. This allows you to put more into the mortgage payment and can even give you more spending money to utilize for other financial goals. Follow some of the advice that is above and you will be able to lower your monthly mortgage payment.
- About the Author
Alex Grigoryan is a Professional Home Improvement and Lifestyle Writer. He has been in the industry for over 6 years and has been writing for Chique Home Living since 2019. His work has been featured in prestigious blogs such as Spruce Home, Better Homes & Garden, and more.