For many homebuyers, the appeal of a 30-year mortgage is too significant overlook. With a 30-year fixed-rate mortgage, you can lock in the same principal and interest payment for the life of the loan. At the same time, you can set up lower payments thanks to the lengthy term. However, when you choose a home loan with a longer term, you will also pay more in interest than you would with a shorter term length in many cases. The good news is that you can reduce interest charges as you pay down your loan balance to save money in several different ways.
By paying down the mortgage balance faster, you can reduce interest charges throughout the remaining life of the loan. Consider making biweekly payments and allocating all of your bonuses, refunds and other cash infusions to your mortgage. You can also explore the possibility of refinancing your mortgage. By doing so, you may lock in a lower interest rate. You could also potentially transition into a 15-year mortgage loan to reduce total interest charges. If your current loan has PMI, you should review your loan documents to determine how to eliminate that expense. In some cases, simply paying down the balance will do the trick. Otherwise, you may need to refinance your loan to establish more advantageous terms without PMI.
Because each of our clients at MortgageDepot are facing unique circumstances, there is not one single step that may save all homeowners the most amount of money on their mortgage. Instead, all of the options should be considered to determine which solutions are most advantageous and feasible for the homeowners. At MortgageDepot, we take pride in helping our customers achieve their mortgage goals. To learn more about the benefits of refinancing your current home loan, contact our lending team today.
Contact one of our loan consultants to learn more.