5 Mortgage Saving Ideas

February 7, 2013
by Kyle Taylor

When it comes to cutting your budget, you probably start with incidental expenses like eating out or having digital cable. But it’s also important to pay attention to what kind of money you can save even on the necessities, like your housing payment. You certainly can’t eliminate your mortgage altogether, but there are ways to make it cheaper for you. Here are five strategies you can use to save money on what is likely your biggest household expense.

Refinance. There are many circumstances in which it is a good idea to refinance your home, the most common being the lowering of current interest rates. Refinancing can help you save money on your mortgage payments, but make sure to use a mortgage calculator to project how much money you stand to save. This is a critical step because if you shell out more in closing costs than you would save from refinancing, it won’t be worth the deal.

Make an extra lump sum payment once a year. This can have the effect of shaving a year off of your mortgage for every 12 extra payments you make, so it’s easy to see how this helps you save money. But you can actually save even more if you coordinate your extra payment with the time period just before your interest rate is assessed for the year. This is because you can reduce your principal a little more, therefore basing your interest rate on a smaller number.

Restructure your payment plan. Instead of making just one payment each month, try switching to making a half payment every two weeks. For all practical budgeting purposes, you will still be making a payment a month, but at the end of the year, you will have made 13 complete payments instead of 12. It’s an effective way of tricking yourself into making an extra payment, even if you feel like you can’t come up with the money all at once.

Get your home reassessed. It’s not directly a savings on your mortgage, but getting your home’s value reassessed for property tax purposes can actually lower the rate that you pay. If your home’s value has gone down since the most recent assessment, you could be overpaying your property tax by hundreds of dollars.

Find out if you still need private mortgage insurance. You may have been forced to get private mortgage insurance when you purchased your home if the down payment wasn’t big enough. If this is the case for you, you can ask your lender if it’s possible to end the PMI plan if you’ve reached a certain benchmark in your payments; usually, it’s 20 percent of the cost of the home. This tip could save you more than $100 each month.

by Kyle Taylor
Kyle is the founder of ThePennyHoarder.com

Share Your Thoughts

Top Articles

What Makes a Good Accountant?

According to the U.S. Bureau of Labor Statistics’ “Occupational Outlook Handbook,” there are a few concrete traits and educational requirements that make up a good accountant. These include analytical skills, being detail oriented, possessing a great ability to compare, interpret, and analyze complex figures, and having keen organizational skills. Oh, and obtaining a bachelor’s degree […]

What Annuity Options Are Available Post-Retirement?

Retirement is something many of us will look forward to. Saying goodbye to the world of work, the daily grind and having to get up at 7am every weekday morning are just reward for decade after decade of turning up to our jobs on time, putting a good shift in and contributing to the economy […]

Are You Making This Budgeting Mistake?

If you’re like many Americans, you sit down every month and make a rough budget.  You estimate how much money will be coming in, and you write down what you will do with that money. Perhaps, like many Americans, when the end of the month comes, you find yourself looking at a negative number. What […]

Company Car or Car Allowance: Which one to choose?

One of the employment benefits most often talked about in Australia must be the company car. It’s a valued benefit, but with a variety of options due to tax law changes back in 2002, it’s hard to tell what is the right choice for you. Let’s walk through the two options, and explore some of […]

Are You Saving All Wrong?

With saving interest rates so low on most accounts, you may be depressed each month when you look at your bank statement.  It was only about 5 years ago that you could easily earn upwards of 5% in a money market fund.  That just isn’t the case now.  But if you’re stuck at 0.50% or […]

The 4 Best Lottery Winner Stories

Whether you go to the gas station or convenience store and pick up your lottery ticket or instead frequent a site like William Hill 49s, you likely play the lottery because you dream of winning it big.  Who doesn’t? It’s hard not to imagine what life would be like as a multimillionaire when you hear stories […]

How to Save Money By Bundling Your Services

There are many ways to be a Penny Hoarder:  find free money with bank and credit card offers, find ways to make extra money on the side, and find ways to save money.  The latter may not get discussed as much as the other two options, but it’s still important. Saving money without diminishing the […]

Setting Your College Student Up for Financial Success

Ah, the end of summer.  Time for the kids to go back to school, including the college students.  The first year of college can be quite a learning experience, not just academically, but socially and emotionally as well.  Unfortunately, for many college students, it’s also a financial learning experience.  I say unfortunately because many college […]