9 Ways to Save Money on Monthly Mortgage Payments

Buying a house is one of life's most significant financial decisions—it costs a lot of money! Want to know how you can save a little (or a lot) when it comes to your mortgage? Consider these nine tips to reduce your monthly mortgage payments, and start saving money today! 

9 Ways to Save Money on Monthly Mortgage Payments 

Let's discuss nine tips to help you save money and achieve your financial goals: 

1. Look around for the best interest rate 

1. Negotiate various fees 

1. Choose a home that fits your budget 

1. Make extra payments  

1. Extend the term of your mortgage 

1. Boost your credit score 

1. Consider refinancing your mortgage  

1. Get rid of mortgage insurance 

1. Take advantage of mortgage points 

Look Around for the Best Interest Rate 

Before committing to a mortgage, it's important to explore different offers from multiple lenders. Even a tiny difference in interest rate percentages can help you save thousands over the loan's lifetime. 

Negotiate Various Fees  

When purchasing a home, reviewing all the associated fees, including closing costs and other expenses, is essential. You may be able to negotiate with the lender or seller to reduce or eliminate some of these fees, lowering your initial payment and even reducing what you owe monthly during the loan term. 

Choose a Home that Fits Your Budget 

It might sound obvious, but carefully considering your monthly income, expenses, and debt is essential before choosing a home. Wise homeowners weigh the cost of homeownership, such as property taxes, homeowners insurance, and maintenance, taking this into account when purchasing a home. Choosing a home that comfortably fits your budget can help you save money on your mortgage payments each month. 

Make Extra Payments 

Making extra mortgage payments can help you pay off the loan more quickly and save money on interest. You can make additional payments by simply paying more than the "minimum due" amount on each bill.  

Some homeowners opt for bi-weekly payments instead of monthly payments. It might not sound like a big difference, but by paying bi-weekly, at the end of the year, you'll end up paying the equivalent of 13 monthly payments—instead of twelve. 

However, be sure to check with your lender to see if there are any prepayment penalties before making extra payments. 

Extend the Mortgage Term 

Extending the term of your mortgage through a new loan or modification is an effective way to take advantage of lower monthly payments.  

It works this way: you've already paid some of the money due on your original mortgage loan. When you refinance, the new loan amount will be less than your initial loan—you'll only be financing the amount you currently owe on the home.  

Refinancing with a new 30-year fixed loan after reducing the balance will lower your new monthly payment at the same interest rate. It's simple math, really, and it can save you plenty of cash. 

Improve Your Credit Score 

Lenders are more likely to provide a better interest rate to borrowers with higher credit. Plus, with a higher credit score, you have more negotiating power to lower your mortgage rate and save money on your monthly payments. If your credit score has improved since you originally signed the mortgage loan, reach out to your lender to see if they can provide you with a lower rate. 

Consider Refinancing Your Mortgage  

Keep an eye on interest rate trends—if mortgage rates drop, you may consider refinancing your mortgage. Refinancing with a lower monthly interest rate can help you save money on each of your payments. If you're curious about refinancing and wondering if it's the right move for you, check out our refinancing guide here. 

Get Rid of Mortgage Insurance 

In some instances, a mortgage lender requires mortgage insurance on a loan. It's essential to make note of this when you sign the agreement—and remember to follow up later. Sometimes, borrowers can get rid of mortgage insurance when they pay off a certain percentage of the loan. In other cases, you can remove the mortgage insurance after a specific time has elapsed. Either way, staying organized and vigilant regarding your finances pays off. 

Take Advantage of Mortgage Points 

If you haven’t yet signed the paperwork for your mortgage, be sure to ask your lender about mortgage points. These “discount points” refer to a method of lowering the mortgage interest rate by paying an upfront fee, or certain percentage of the loan. To learn more, feel free to check out this blog post. 

More Advice from Mortgage Experts 

From shopping around for the best interest rates to making extra payments whenever possible, these tips can help you reduce your mortgage expenses and save money over the loan's lifetime. By following this advice and staying on top of your finances, you can make the most of your homeownership experience and enjoy a more comfortable, affordable mortgage payment. 

The Mortgage Minds Group is here to assist you in saving money on your monthly mortgage payments. Our team of trusted professionals is always ready to help you find your dream home or provide refinancing solutions. Click here to get in touch with us today!