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Recently, many people have called asking me how they can save money on their mortgage payment. You may think that the solution is to refinance to a 10- to 15-year mortgage. However, although you’ll certainly pay a lot less over the life of the loan, you will have to pay a host of fees in order to refinance in the first place. Is there a way to save on monthly payments without refinancing?
Instead of going through the hassle of refinancing, we recommend making an extra mortgage payment every year. This can shave up to six years off your mortgage and save you tens of thousands of dollars! There are many mortgage calculators out there that can tell you how to pay off your mortgage faster and how much money you will save doing it.
Another option is to make biweekly mortgage payments. This is, in effect, doing the same thing as paying an extra mortgage payment. You have a few extra weeks every year that will allow you to pay off your mortgage faster, without locking you into a steeper payment every month. Even paying an extra couple hundred dollars a year can save you thousands in the long run!
If you’re paying credit cards down or you still have other outstanding debts that have higher rates than what you’re currently paying on your mortgage, obviously you want to pay those off first. Or, if you have investments you can put that money into to help save money and make a better return on what you’re paying right now, talk to your financial advisor to see what your best options are.
If you have any questions about this topic, or if you need real estate assistance of any kind, we’re always available to help. We would love to hear from you!
