Tips to Save Money on Your Mortgage

Buying a home is still an achievable part of the American Dream for most people. Many people prefer to save for a down payment and then take out a mortgage to make a purchase. For most, the monthly mortgage payment is their biggest monthly expense.

When looking for ways to save money, it’s always a good idea to look at your biggest expenses first. Saving just a small amount on those big bills can make a big difference in your overall budget.

Here are some mortgage loan tips to help you save money:

Ask for help to close

Buying a home is an investment, not a rental. So the sooner you start investing in your own home, the better off you will be. There are organizations that offer help with things like down payments and financing to help you become a homeowner faster.

Find out if you’re eligible for a First Time Home Purchase Grant, which can help with your down payment and closing costs. There are also special programs for veterans, teachers, and low-income families, and if you want to live a little further afield, the USDA also offers help.

With the help of close, you can avoid penalties or higher loan fees due to credit problems or insufficient funds.

Add an additional payment each year

This is one of the best mortgage payment tips that no one will ever tell you. Mortgage payments are determined based on an amortization schedule that calculates a portion of the principal and a portion of the interest due each month. The interest you pay is based on the remaining principal and therefore varies over the life of the loan.

When you sign a loan agreement, the lender can tell you what each monthly payment will be and how long it will take to pay off the mortgage.

Adding a premium might seem like a small thing, but it has a cumulative effect. The back payment goes directly to paying off your principal debt, as your current payments cover the interest for the year. By reducing your principle, you lower the interest you pay on the balance of your mortgage.

Doing this every year will shave several years off the time it takes to pay off your mortgage.

Another way to save on your mortgage is to pay every two weeks. Instead of paying monthly, you pay half of your monthly payment every two weeks. It sounds like it will have the same effect, but in reality you end up making the equivalent of 13 payments a year.

If you divide the 52 weeks of the year by 12 months, you get more than 4.3. Part 0.3 will be added to another mortgage payment before the end of the year.

Get rid of PMI

Private mortgage insurance is a part of life for many mortgage holders. After closing, most people forget about it. PMI is only required if your mortgage is more than 80% of the value of your home. If this falls below 80%, you can ask your lender to cancel PMI. This can save you hundreds of dollars each month.

Depending on the value of your home and the amount of your mortgage, this threshold can be reached at any time. If you renovate your home and add value, you can achieve this. Or, if you pay your principle, you can achieve it this way. It’s up to you to monitor the value of your home and mortgage policy defaults to determine when you’ve crossed the 80% threshold.

reset credit

This savings method lowers your monthly mortgage payment. Resetting or renegotiating your loan is something you can ask a lender to do if you are making additional principal payments. For example, if you have a 30 year mortgage and you pay off the mortgage with an additional payment each year, the mortgage will be repaid in less than 30 years.

You can go to a lender and ask for a reset on your mortgage. Instead of continuing to pay the same amount each month and reducing your mortgage term, they may agree to reduce your monthly payment and allow you to continue paying for the full 30 years.


When interest rates fluctuate, you can take advantage of your refinancing savings. Refinancing means you are negotiating new mortgage terms. When you factor in the current value of your home, how much you still owe on your mortgage, and the best interest rate available, you can save a lot.

When refinancing, you generally don’t have to pay any penalties that you might face initially for a small down payment or credit problems. Depending on the new terms available to you, you may be able to shorten the term of the loan or reduce your payments. You can withdraw your savings anyway.

Use the services of a mobile notary

Getting a mortgage involves collecting information and filling out forms. The degree cannot be completed without proper documentation, most of which must be notarized. Hiring a mobile notary for your closing can cut your stress in half and ensure a smoother transaction. Documents must be signed and notarized.

With a mobile notary, this step can be completed without leaving the room.

Mortgage down payment tips

In addition to these tips to save on your mortgage, there are some mortgage down payment tips that can also save you money.

The best advice for a mortgage down payment is to make it as high as possible. It may not seem like a way to save money, but it is. Think of your home like a savings account. The money invested is returned with interest when the property is sold.

A large down payment shows lenders that you are serious about the purchase and that you are financially responsible. The more you are willing to contribute to the purchase in the form of collateral, the less you risk. Also, a large down payment reduces the amount of money you have to borrow to make a purchase. A smaller mortgage means lower monthly payments or a faster path to full home ownership.

Owning a home is a financial responsibility that usually starts with a mortgage. With these smart tips, you can pay off your mortgage faster and get much closer to financial freedom. Mortgages are a big expense, but saving money on them can help make them more manageable.