With the market continuing to be uncertain and the prospect of more interest rate rises on the horizon, we are all aware of the increased cost of living and Christmas shopping upon our doorstep!
So, we have some tips here that can make your money go a little further, by potential saving on your mortgage.
1. Shop for the best interest rate: Compare mortgage rates from multiple lenders to find the lowest one. Even a small difference in interest rates can lead to significant savings over the life of your loan.
2. Improve your credit score: A higher credit score can qualify you for better mortgage rates. Pay your bills on time, reduce outstanding debt, and avoid opening new credit accounts before applying for a mortgage.
3. Make a larger down payment: A larger down payment reduces the principal amount of your loan and may help you avoid private mortgage insurance (PMI), which can be an added cost.
4. Choose a shorter loan term: Opt for a 15- or 20-year mortgage instead of a 30-year one. While your monthly payments may be higher, you’ll pay less in interest over the life of the loan.
5. Refinance your mortgage: When interest rates drop or your credit improves, consider refinancing to secure a lower interest rate. Be sure to calculate the break-even point to determine if it’s financially worthwhile.
6. Make extra payments: If your mortgage allows for it, make extra payments towards your principal when you have periods of less expenses. Even a little extra each month can reduce your loan term and save on interest.
7. Biweekly payments: Pay half of your monthly mortgage payment every two weeks. This results in one extra payment per year, which can help pay off your loan faster.
8. Round up your payments: Round up your monthly payment to the nearest hundred or even add a few dollars more. This can help reduce your principal over time.
9. Make one-time extra payments: Use windfalls like tax refunds, work bonuses, or inheritances to make lump-sum payments toward your mortgage principal.
10. Avoid adjustable-rate mortgages (ARMs): Fixed-rate mortgages provide stability in your monthly payments, whereas ARMs can increase over time, leading to higher costs.
11. Keep an eye on your escrow account: Review your property taxes and homeowners insurance regularly. Discrepancies or overpayments can lead to unnecessary expenses.
12. Invest in energy-efficient improvements: Making your home more energy-efficient can reduce utility bills, leaving you with more money to put towards your mortgage.
Remember, before making any changes to your mortgage strategy, it’s important to consult with a financial advisor or mortgage professional to ensure the changes align with your financial goals and circumstances.
