Friday, September 03, 2010
Make the move to reduce your mortgage
In an effort to save more, many household budgets have omitted extras, like cafe coffee, dinners out, and entertainment. But, if you're a homeowner, your biggest savings ally lives within your mortgage. That loan most likely is your biggest monthly expense--while interest rates remain at record lows (MarketWatch.com, Aug. 25).
Here are ways to reduce your home loan expense:
Refinance: Refinancing at a lower rate can cut your monthly payment by hundreds of dollars. And if you can afford to refinance to a shorter term, you could save thousands of dollars in interest over the life of the loan.
Automate it: Many financial institutions offer an even lower rate if you set up automatic mortgage payments.
Ask about fees: It doesn't hurt to ask the loan officers at your financial institution if lower fees are available on some mortgage costs. If you have good credit, the lender may even waive a few charges.
Dropping PMI: Lenders require PMI (Private Mortgage Insurance) from most home buyers who obtain loans for more than 80% of their new home's value. You can contact your lender to find out how you may be able to drop the PMI insurance sooner, which will free up money going to your premium.
Portions of this article were derived from Home & Family Finance(R) Resource Center