by Jera Perkins, Updated September 24th, 2016
For most homeowners, mortgage payments comprise the majority of their take home monthly income. As such, it’s important to evaluate how to potentially reduce the monthly loan payment, or possibly pay it up faster, to save on interest, and eventually trim down the expense and increase the savings.
Here are 5 ways homeowners can start using to bring down their mortgage bills.
This only applies to future homeowners (in the market and shopping around for a new home). Even though it sounds steep, a 20% minimum down payment on your loan really helps bring down your monthly mortgage bill, as well as it eliminates the need for an added cost by NOT resorting to PMI (private mortgage insurance).
Chances are that if you purchased a home without putting down at least 20 percent of the home loan, your lender required you to purchase using PMI (Private Mortgage Insurance). Depending on many variables, PMI will cost you around an additional $200 extra per month. We strongly advise you to get rid of your PMI if you can – by paying off your loan faster up to the required 20 percent.
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This does not sound appealing – but if the goal is to reduce your monthly bill and pay less every month – it’s definitely worth considering. The faster you pay off your home loan, the lower your amortization and monthly bill will be.
If you have the extra room to spare, consider creating additional income for yourself by renting out part of your home. This works best if you have a guest house or a room with a separate entrance, or a basement, so you and your potential tenant/s don’t necessarily need to be in each other’s space.
You can hire a tax assessor and have them re-evaluate your home. They may find out that your home was actually overvalued, and that you’ve been paying up too much tax. If that’s indeed the case, you are in for some great savings, as your property taxes will lower, and you may also qualify to claim retro-active taxes back from overpayments from previous years.