• Home
  • About
    • Crush Your Budget Challenge
    • The Blog
    • Blog Contributors
  • Debt Freedom
    • Your Free Guide to Paying Down Debt & Saving Money… Even on a Limited Income
    • Budgeting
  • Save More
  • Earn Money
    • Career
  • Spend Less
    • Holidays
    • Travel
  • Recommendations
  • Contact/Privacy
    • Work With Me
↑

Sunburnt Saver

Life is hard - money management shouldn't be!

Crush your budget!

subscribe today & get your free budgeting ebook to quickly get your finances on track

Success! Now check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

5 Ways To Save On Your Mortgage Without Refinancing

Leave a comment

This post may contain affiliate links, which means if you click through and purchase something using my links, I receive a small commission. You can click here to read my disclosure policy 🙂 Thank you!

According to data from Sept. 2016, 59% of homeowners didn’t have a complete understanding of the details and terms of their mortgage and wished they knew it better. When a homeowner wants to save money on their mortgage, they often turn to refinancing options, but that could end up costing more in the long run. If you don’t want to refinance your loan, here are alternative options that will still help you save on your mortgage.

  1. Recasting your loan
    To recast your loan, you pay a lump sum toward the principal of your loan, reducing its principal balance. This overall reduction then lowers your monthly principal and interest payment. Based on the lower amount that is now due, your monthly payments are re-amortized, or reset. This option requires that initial large sum, but if you’ve recently come into a large inheritance or received a large bonus, recasting is a great option. Unlike refinancing, there is no credit check or income verification and lenders charge a much lower fee.
  2. Opting for a 15-year mortgage instead
    A fixed rate mortgage comes with varying loan terms, and the most common of these loans are 30-year fixed and 15-year fixed. While you will have higher monthly payments with a 15-year mortgage, you will save more money on interest in the long term. In a $200,000 fixed-rate mortgage with a 4% interest, you would pay about $500 more a month, but save over $77,000 in interest rates.
  3. Making extra payments
    Another way to save on interest over the long-term and pay off your loan sooner is to make extra mortgage payments each month. With this option, you want to make it clear to the bank that your extra payments are for the principal of the loan, rather than the full loan. Otherwise, the bank will likely apply it to the next month’s interest. You can communicate this by writing this specification in the memo of a check, or checking off a box when paying electronically.
  4. Cancelling the PMI
    Private mortgage insurance (PMI) is initially required for many people when their down payment is less than 20%. Once your mortgage balance falls below 80% of the home’s appraised value, you can petition your lender to cancel the insurance. Often, the balance will fall if your home’s value has gone up or when you have repaid some of the principal. Although the process may require a new appraisal, cutting the PMI could save you hundreds on your monthly payments.
  5. Modifying your loan
    For those who are having trouble making monthly payments and don’t have extra money to put towards recasting or additional monthly payments, talk to your lender to modify the terms of your loan. If you’re going through financial hardship, you may qualify for programs that adjust your mortgage rate, terms, or principal balance. Many lenders offer these options because they would rather have borrowers stay in their homes and continue making payments, even if they’re lower, than going through the process of foreclosure.

On average, homeowners have mortgage payments that make up about 16.5% of their annual household income. If you’re looking to reach this national average or go below it, try one of the methods above to save on your mortgage.

Pin
Tweet
Share
Pocket
0 Shares

Filed Under: Save More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

You know it's important to manage your money - but who has time to figure it all out? I'll help you cut through the hype to find practical, efficient solutions for managing your money that work on your busy schedule!

Amazon Associates Disclosure

Sunburnt Saver is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites. For more information on my disclosure policy, please click here.

Popular Posts

New? Start Here!

  • Recommendations
  • Spend Less
  • Save More
  • Debt Freedom
  • Earn Money
  • Debt Freedom
  • Get In Touch
  • About Melissa

Follow me on Instagram!

Load More...Follow on Instagram

Featured On



Load More...Follow on Instagram


Copyright ©2019, Melissa Berry LLC. All Rights Reserved.
Design by Pixel Me Designs
Looking to #save more #money on a limited income? These easy #frugal #hacks are perfect for busy people who are looking to save more!

Do You Want to Save $1,000 This Year?

Your FREE guide to easily saving an extra $1,000 by the end of the year!

Unsubscribe to our newsletter any time!

x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Ok