Summer is a beautiful time to live in Maine. With the gorgeous landscape and low humidity, what’s not to like? Summer is a great time to think about your future financial goals. Do you have enough savings to retire? What about paying off your mortgage early? Maybe you just want to get your finances under control. From budgeting and refinancing to using your home’s equity, read for more tips and tricks to save on your summer mortgage payments.
- The importance of budgeting for your mortgage payments
When it comes to saving on your mortgage payments, budgeting is vital. Managing your monthly budget can take time and effort. Determining where your money is going is one of the most important aspects of controlling your budget. First, take stock of all your debts, including typical homeowner costs like property taxes, private mortgage insurance (PMI), property taxes, and utilities. Consolidating your debt can help you take control of your finances. Our monthly budget worksheet and managing debt calculator are great resources to help homebuyers and homeowners alike.
- Refinance your mortgage for lower monthly payments
Refinancing your mortgage is a great way to help you save money on your mortgage payments. What are the benefits of refinancing your home?
- Access cash: If you have built up equity in your home, you can turn that equity into cash. Use it for home repairs, medical fees, or debt consolidation.
- Pay off your mortgage sooner: Refinancing your mortgage to a shorter term will allow you to apply more of your income toward your loan principal each month and pay off your mortgage sooner.
- Lower your monthly payments: Your income has decreased, or you want to increase your savings for college or retirement. Extending your loan term could lower your monthly payment.
- Pay less overall for your mortgage. By refinancing to a shorter term and reducing your mortgage interest rate, you could pay less interest throughout your loan.
Check out our refinance application checklist for more information on refinancing your mortgage.
- Strategies for paying off your mortgage early
In most cases, you can pay your mortgage off early without penalty — but there are a few things to remember before you do: check with your mortgage lender for a prepayment penalty or payment restrictions.
You can split your monthly mortgage payment in half and make biweekly payments instead. Doing this will make 13 months of mortgage payments in one year instead of 12. This tactic could be easy for some homeowners because the extra cash might be less noticeable in the monthly budget. Consult with your mortgage lender to confirm whether it accepts biweekly payments.
- Use your home equity to lower your mortgage payments.
The main reason homeowners take out home equity loans to pay down their mortgage is that they think doing so will result in lower monthly payments. If interest rates have declined since the original purchase, the home equity loan will carry a lower interest rate than the existing mortgage. In this scenario, the homeowner would take out a home equity loan, which would have its interest rate, amortization schedule, and term, and essentially would be refinancing some or all of its existing mortgage. Check with one of our mortgage experts to see if any prepayment penalties apply.
Do you have questions about your mortgage loan payments or your ability to refinance? Our experienced mortgage team will guide you through the entire mortgage process. We’ll help you determine your financial strategy, mortgage amount, and purchase price. To schedule a free no-obligation consultation, contact KFS Mortgage Company today.