When you have a mortgage, the thought of being able to save money is obviously a tempting one, but it is actually quite possible to do this. It is a lot of money over a long period of time. The sooner it is paid, the happier you will be.
In the long run, you can actually shave off several thousand dollars if you do certain things, such as making some changes and perhaps a few sacrifices. To the rich, this may not mean a thing, but for the rest of us, we would jump at it! So, let’s take a look at what you can do to save your hard-earned money when paying your mortgage rates.
1. Bigger Payments
Though this may not always be possible and it isn’t always easy, you can reduce your principal if you make bigger payments. This does not have to be all the time. Occasionally, you may come into some extra money. If you do, make this payment. There are times that you may get something extra in your tax returns. Perhaps you received an extra commission or bonus from work. Maybe you decided to have a garage sale and made quite a killing. When you make these larger, extra payments, it reduces the amortization period. You could save thousands of dollars by doing this.
2. Look For Deals
Sometimes, you can get a deal when you use a lender instead of a bank. Lenders have been known to lower their rates, which is good news for you. This is why you should take the time to look around first before making your decision. It may be tempting to just go with the lowest rate, but this does not necessarily mean it is the best option for you. You should look at an option that allows you to make lump-sum payments as well, since this would be advantageous for you. This allows you to pay it off much quicker.
3. Make Bi-Weekly Payments
If you are currently paying on a monthly basis, consider changing that to bi-weekly payments. This can reduce your amortization period. It can also quicken your mortgage payments. Only thing with this method is that your payments will be higher. However, where there’s a will, there’s a way, right? You can manage this if you cut back on something else. You see, when you use bi-weekly payments, at the end of the year, you have actually made an extra month of payment. If you can do this every year, it will make a significant difference. You could save a few thousand dollars this way.
4. Consider Renting
Here is something not many people think of or do, yet it is so simple. Why not consider renting out a garage, a room or a parking space? Think of how this regular extra money can make a big difference.
Before you even buy a house, consider buying one that you can afford, otherwise you will struggle. Consider being frugal as well. Before splurging, ask yourself if something is needed or if it will make you happy. Is it really necessary to eat out 3 times a week? Bring your own food to work. Maybe treat yourself every Friday to an outside meal, but the rest of the time, you can save if you brought your own food. What other little things can you do that can save you money?