If you’re a first-time homeowner, you already know the importance of getting a mortgage. After all, it’s a surefire way for you to access the funds you need to secure a purchase. However, depending on the mortgage you have, the monthly costs it entails can be too cumbersome.
One thing’s for sure, making monthly mortgage payments can be heavy on the pockets. Even if you are on a fixed-rate plan, you still have to deal with overhead costs and remaining balances from prior expenses. Adding to that are the property taxes and other homeownership costs that can run your finances into the ground.
As a homeowner, and a well-meaning one at that, you will have to consider reducing your monthly expenses, and what better way to start it off than with your mortgage premium? Here are a few tricks you can use to save:
1. Recalculate your escrow payments
Every year, the amount you pay for your mortgage through escrow is recalculated. This is because there are cases when you pay more for the escrow itself than for your mortgage. This leaves you making larger monthly payments unless you contact the lender and have them recalculate your escrow costs. Your payments will be recalibrated so you can go back to paying the regular rate.
2. Refinance your property
One very basic strategy for avoiding mortgage increases is to refinance your home. Considering that interest rates won’t stay where they are, it’s important that you take advantage of a high interest environment. However, if you don’t have enough savings or if your credit score is bad, you may as well explore other options.
3. Re-asses you home
If you’re being made to pay higher property taxes, then you may as well investigate the reason for it. Typically, this situation is a result of inaccurate information and miscalculations. In such a case, you can request the mortgage company to have your property reassessed and inspected. This will allow you to get a more accurate description of your home and recalibrate your payments. This will certainly save hundreds of dollars on homeownership costs.
4. Review your insurance quotes
Another great way to keep your mortgage payments low is to focus on your current home insurance policy. What is covered under the policy? As a good rule of thumb, having one policy is simply not enough. You can get a wide range of benefits if you apply for new insurance quotes on top of your existing one. This allows you to get discounts on your insurance deductibles and further drives down your homeownership payments.
If you’re looking for additional insurance for your home, you can research online for the best policies you can afford. For this, opt for a policy that provides additional coverage for health and natural calamities. Allstate Insurance, for example, offers coverage for a wide range of issues such as frozen plumbing and hail.
You don’t have to pay a lot on your mortgage every year. All you need is to be practical, and with these tips in mind, you will be able to save up for something that’s worthwhile -- maybe a major renovation!