How to Save on Your Mortgage Payments in 2013

If you’re like most homeowners you probably spend about 30% of your net income on your mortgage.  That’s normal but bit still is a large chunk of your earnings and, if it can be lowered, why not lower it?  With that in mind we have an excellent list of the best ways to save on your mortgage this year so take a look and, if you see something that may help, by all means please use it and save some money.  Enjoy!

Use your tax refund to make a bigger payment on your mortgage or use the extra money from a windfall to do the same.  One big payment now will mean smaller payments for the rest of the year (if you want them), free up some of tour cash and help reduce your debt load.

Making bi-monthly payments can help you because you’ll pay off your mortgage faster but remember that many lenders charge a fee to do this.  Make sure that this fee, whatever it is, is less than the amount that you’re possibly saving before you sign up for the service.

If you want to shop around for lower rates by all means do so but keep in mind that many lenders will charge fees that may end up cancelling out your savings.  Take a hard look at these fees before you sign up for your new rate to make sure that the change is actually worth it. Having a high credit score and an excellent credit history will help you with this one and, since lenders want to keep your business, be prepared to negotiate.

If you want to free up some of your cash now and don’t mind paying more overall for your home than extending the life of your mortgage may be a good bet for you.  This should reduce your monthly payments but will mean that the house won’t be paid off as fast.  Once you can handle it you can always go back to making the regular payment and pay it off faster anyway if you want to.  Although I will say that if free cash flow is your true interest here, then consider for fast cash rather than extending your mortgage.

If your home falls below 80% of its appraised value you can ask the lender to cancel your private mortgage insurance (PMI) and save a bit every month. You may need to get an appraisal to do this but it may well be worth the trouble and expense.

Another factor to consider if your home is worth less than what you are currently paying on your mortgage is the PRA program.  This stands for principle reduction alternative  and, if your payments are more than 31% of your monthly income, you may be eligible for this program and start saving money on your mortgage right away.

Not bad right?  Hopefully some of these ideas have set off alarms in your little noggin and will enable you to save a bit (or more) this year on your home’s loan.  Good luck with them.

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