Mortgage Money-Savers

One of the highest expenses in households today is the mortgage. The loans and interests rates add up quickly, and never seem to disappear. There are several ways to cut back your mortgage expenses, and surprisingly can help you save thousands of dollars each year. Obviously results will be different for everyone’s situation. However, keep in mind that if you make the effort to cut other expenses to get ahead on your mortgage payments, you will benefit greatly in the long run.

Put the sixty dollars you spend eating out each month to your mortgage. That will add up quicker than you realize. If you get a raise, change the amount you pay for your mortgage to speed up the process of paying off loans.

Also, consider refinancing your mortgage. For every $10,000 of your mortgage loan, ½ % difference in the interest rate saves you over $40/year or $3.40/month in interest expense. A $100,000 loan at 9 ½ % refinanced at 7 ½ % saves $142/month or $1,704/year, for a total of $50,991 over the life of a 30-year mortgage.

For an even more dramatic long term savings, consider a 15-year mortgage rather than 30-year. A $100,000 mortgage at 9 ½ % over 15 years saves $114,747 over the life of the loan compared to a 30-year mortgage at the same interest rate. At 7 ½ %, the savings between a 30-year and 15-year mortgage of $100,000 would be $84,854. A 9% loan of $100,000 refinanced for 15 years at 7 ½ % would add $86/month to your payment but would save you over $135,000 over the span of the loan.

You can achieve similar results by paying an extra principal payment on your 30-year loan each month. If you have extra cash, go above the regular payments. Try to get the loan paid off as soon as possible to eliminate interest rates.

Another way to achieve these results is to pay one half of your monthly mortgage every two weeks. As you can see just making minor changes in your mortgage plan can add up to thousands of dollars of savings.

Each little step you take puts you further on the track to debt-free home ownership! And that’s a feeling that money just can't buy!