REGION – When groceries, utilities, insurance, and everyday expenses all start to cost more, your monthly budget can start to feel tight. And you’re not the only one feeling the pinch.
The usual advice is to spend less. But there could be another way to save money that you haven’t looked into yet – your mortgage.
Depending on your loan and the equity you’ve built, a few adjustments could help you lower your monthly expenses. How? By lowering your payment, reducing the interest you pay, or making the payment easier to manage throughout the month.
Remove a monthly cost
If you didn’t have 20% to put down when you bought your home, you may have used private mortgage insurance (PMI) to help you with the purchase. Fast forward to today, and you may still be paying PMI even if you don’t need it anymore.
A refinance could help you remove PMI from your mortgage depending on the loan type chosen. Without paying PMI each month, that could mean you have more money in your budget to cover your everyday expenses without having to cut everything out.
Keep in mind, refinancing means closing costs and a new rate. So, let’s talk about your options to make sure a refinance will improve your overall budget, not just one part of your payment.
Make your payment easier to manage
Sometimes, it’s not the mortgage payment itself that gives homeowners stress. It’s that an amount that large leaving their account all at once has started to hit their wallet harder than it used to.
If that feeling sounds familiar, it may be time to consider biweekly payments. With biweekly payments, you can break your monthly mortgage payment into two smaller ones made every two weeks. This can feel easier to manage, especially if your paychecks fall on the same schedule.
An added bonus of biweekly payments is that, if you stick to it, you can make one extra full mortgage payment each year. That means you could pay down your loan faster and reduce the amount of interest you pay over time. Make sure you talk to your loan servicer about how to set up your biweekly payment schedule so that your payment is always completed on time.
Let your mortgage carry more of the load
When the cost of living gets more expensive, you may not have to immediately cut out all the little things that make life fun. First, take a look at what your mortgage could be doing better. Whether it’s removing PMI to lower your monthly payment or making biweekly payments so things feel more manageable, there’s more than one way save with your mortgage.
Submitted by Victoria Blodgett, PrimeLending, Ludlow, Vt.