As you build your own American Dream a home is at the top of your list. but not just any home. A home that is free, clear, and ALL yours. Paying off your mortgage fast is doable but what if I told you that you could save money on your mortgage all around? Your home is the biggest investment you will ever make and doing it wisely will get you more bang for your buck.
Save money on your mortgage if you are just starting the buying process
Improve your credit while you are preparing to buy a home. I used these simple tips to grow over 100 points on my credit score in just six months. Building your credit can get you the best deal on your home and allow you time to build an emergency fund as well as a down payment for your new home.
Save a large down payment while you are working on your credit. While this can take time and you may want your home fast this is a great way to negotiate better terms on your home mortgage so it is worth the time spent to gain purchasing power.
Shop for the best terms on your home mortgage. So often people jump in with the first lender to give them a pre-approval. Jumping in head first can be a costly mistake. Look for low-interest rates that will save you money in the long haul. The pre-approval process is a great time to negotiate interest rates.
Save money on your mortgage if you already own your home
The good news is you can still save money on your home mortgage even if you already own your home. Your best option is to work on paying your mortgage off fast to cut the amount of interest you will have to pay in the long run.
- Pay an extra payment every year.
- Put any returns from your escrow account into your principal
- Invest your tax return into paying down the principal on your mortgage.
Have your mortgage recast allowing your payment to be lower and keeping a bit more money in your pocket each month. This is a great option if your goal is to keep more each month.
If you have been working on your credit why not give refinancing a try to get a lower interest rate than you qualified for when you first started out? This will save you a large sum later on interest in making your house cost less in the long run.
Drop your mortgage insurance for a lower cost to allow you to save hundreds of dollars a year. If you have proven to your lender that you are good about making your payments you may be able to negotiate to drop this extra cost from your payments.
Shop around for better homeowners insurance rates. Much like shopping for the best deal on auto insurance you want to take the time to shop around for the best homeowners insurance rates. This will cut your monthly mortgage payments.