6 Tips to Help You Reduce the Cost of Your Mortgage

One of the best ways to reduce your monthly expenses is to reduce the cost of your mortgage. Mortgage payments can be a huge burden on the family budget and reducing them can have significant financial benefits. In this article, we’ll discuss 6 tips to help you reduce the cost of your mortgage.

How to Cut Mortgage Payments

It is possible to reduce your monthly mortgage payments without refinancing. If you want to reduce your payments without going through the hassle of refinancing, you can consider a couple of strategies:

• Extend the Term of Your Loan: One way to reduce your monthly payments is to extend the term of your loan. This will spread out the payments over a longer period of time, lowering the amount you have to pay each month. However, keep in mind that extending the term of your loan will also increase the amount of interest you pay over the course of the loan.
• Switch to Bi-Weekly Payments: Another way to reduce your monthly mortgage payments is to switch to bi-weekly payments instead of monthly payments. With bi-weekly payments, you pay half the amount of your monthly payment every two weeks instead of once a month. This can reduce the amount of interest you pay over the course of the loan.

Strategies to Reduce Mortgage Costs

If you’re looking for a more comprehensive approach to lowering your monthly mortgage costs, refinancing may be your best option. Refinancing your mortgage can help you lower your monthly payments in several ways:

• Get a Lower Interest Rate: One of the most common reasons for refinancing a mortgage is to get a lower interest rate. A lower interest rate means lower monthly payments.
• Switch from an Adjustable-Rate Mortgage to a Fixed-Rate Mortgage: Another reason to refinance is to switch from an adjustable-rate mortgage to a fixed-rate mortgage. With an adjustable-rate mortgage, your payments can vary month to month. With a fixed-rate mortgage, your payments remain the same over the course of the loan.
• Switch from a 30-Year Mortgage to a 15-Year Mortgage: You can also refinance to switch from a 30-year to a 15-year mortgage. This will lower your monthly payments and also help you pay off the loan more quickly.

The Benefits of Lowering Your Mortgage Payment

Lowering your mortgage payments has several benefits. Most obviously, it will lower your monthly expenses, freeing up more money for other expenses. It can also help you pay off your mortgage more quickly, reducing the amount of interest you pay over the course of the loan. Additionally, it can help you build equity in your home more quickly.

Simple Tips to Save on Your Mortgage

In addition to refinancing, there are several other simple tips you can use to reduce the cost of your mortgage. These tips include:

• Make Extra Payments: Making extra payments, either with a lump sum or with bi-weekly payments, can help you pay off your mortgage more quickly. This can reduce the amount of interest you pay over the course of the loan.
• Pay Your Property Taxes on Time: Paying your property taxes on time can help you avoid penalty fees and interest, which could increase your mortgage payments.
• Shop Around for Homeowners Insurance: Shopping around for homeowners insurance can help you get the coverage you need at a lower price.

Ideas to Reduce Your Debt Burden

In addition to reducing the cost of your mortgage, there are several other strategies you can use to reduce your overall debt burden. These strategies include:

• Make a Budget: The first step in reducing your debt burden is to make a budget. A budget can help you identify areas where you can cut back and save money.
• Pay More Than the Minimum Payment: Making more than the minimum payment on your credit cards and other loans can help you pay off your debt more quickly and reduce the amount of interest you pay.
• Consolidate Your Debt: Consolidating your debt can help you reduce your interest rates and make your payments more manageable.

Reducing the cost of your mortgage can have a significant impact on your monthly expenses and overall debt burden. By following the tips discussed in this article, you can reduce your monthly payments and save money in the long run.

A few of the more experienced financial advisors and professional mortgage consultants who have written on this subject include former Wall Street Journal columnist, Greg Iacono; former Money Magazine editor, Jean Chatzky; and former CFO of NBT Bank, Mark Russo.