MORTGAGE MONEY-SAVING TIPS
MORTGAGE MONEY-SAVING TIPS
This last section is just a short list of money-saving tips that can be implemented along the way. The goal is to find the best ways you can to save a little money on your mortgage.
Here are five valuable tips:
PRIOR NEGOTIATION
It is entirely possible to get some of your mortgage fees reduced or waived through negotiation with the lender. This might include document preparation fees, or the lender’s attorney fees among others. Keep in mind that the mandatory fees are the appraisal, processing fee, title fees, credit report fees, inspection fees, and private mortgage insurance. Why are those mentioned first negotiable? The reason is that the lender doesn’t make a dime on any of them.
CHOOSE THE RIGHT TYPE OF MORTGAGE
Make sure that you know what kind of loan you want at the beginning. You need to factor in how long you plan to be in a home, as well as what your projected financial status might be. The answers to these two questions can help you choose between 30-year fixed-rate mortgages and ARMs. You want the mortgage loan that will offer the most financial advantages for your circumstances and time in the home.
MAKE EXTRA PAYMENTS
Obviously, the more that you can pay each month on your mortgage, the more of your money will go towards paying the principal of the loan, rather than towards interest. You can potentially shorten your loan term by paying extra payments.
BI-WEEKLY PAYMENTS
Similarly, if you change your payment schedule to a bi-weekly arrangement, you will be able to fit in an extra payment every month. This has the potential to reduce your mortgage term as well. If you have room in your budget to implement this type of procedure, you can use part of your paycheck to make a payment. This may not be viable for every borrower’s circumstances. Regardless, it is great tip.
AVOID PMI
One way to save over the course of your loan term is to wait until you can pay the minimum 20 percent down payment, so you do not have to purchase private mortgage insurance, which is an added expense to your monthly payment. Of course, if you already have PMI, your strategy should be to accumulate 20 percent equity, so you can get rid of the coverage and start saving money.
