Your mortgage payment is a huge addition to your monthly expenses. It would save you a lot of money if you can trim your mortgage costs and even shorten your house loan term. But how would you be able to do that?
Add an Extra Payment Each Year
This is probably the easiest way to cut down your mortgage length. According to lenders in Alabama, making an extra payment every year will be applied to your principal balance and not the interest rates. This will both drop the remaining balance on your account and decrease the number of months that you will have to pay interests on the remainder of the loan term.
Mortgage experts from Mobile would often advise their clients to do more than one payment extra payment every year. Each month will be deducted to your mortgage length, making it even shorter with each extra payment.
Try to Set up Payments Every Two Weeks
Another way to get your mortgage completed early is by setting up a bi-weekly payment plan. You can put half of your regular housing loan payment in savings account every pay day. Then set up an automatic debit from your savings account. At the end of the year, you’ll have one extra payment. This extra payment will then be put towards your principal balance. If you find it hard to set up bi- weekly payments, you can try to hire a company that can be an escrow service. They will be the ones who will manage the payment for you, making it easier for you to stick to your goal. However, there may be some charges for it so it would be best to ask them first before getting their service.
Don’t Spend too Much on Expensive Add- on
See if you’re still paying for overpriced contents insurance and building insurance that are included in your monthly mortgage payment. Ask if you can have these charges taken off. However, before you do, make sure that you wouldn’t need those extra expenses in the future.
Remove Your PMI
Private Mortgage Insurance or PMI is required to borrowers who made a down payment that is less than 20 percent. You can ask your lender to cancel the PMI as soon as your principal balance goes down to 80 percent from the total home appraised value. You can save up to $130 per month if you remove your PMI.
Lower Your Tax Assessment
If you think that your house’s market value has decreased for the past few years, it would be best to have your property tax reassessed. You might be able to lower down your yearly taxes if you petition your assessor to have your taxes revised.<< Back to the list.
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