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4 Handy Tricks for Trimming Your Mortgage Costs

a man handing a bag of coins in exhcange of a wooden home, mortgage conceptGetting a mortgage is one of the sure ways of attaining your goal of providing a shelter for you and your loved ones. However, if you aren’t careful, it could be a major source of stress. Knowing how you could reduce your mortgage costs will save you money and the pressure that comes with it. The tips below will set you on the right path towards saving significant mortgage costs.

The down payment

Before considering taking a mortgage, ensure that you have a lump sum money for your down payment. Most mortgage companies require a down payment of at least 20%. Failure to raise this puts you in a class of risky lenders and therefore required to have a private mortgage insurance (PMI). This will increase your monthly interest payable by at least 1% until your mortgage balance falls below 80%. Aim at getting mortgages without PMI in Salt Lake City or any other state and reduce the interest payable.

Better rates

Settling for the first mortgage firm you encounter will rob you a chance to get a better deal. Be open and visit several mortgage companies and get their best rates. Compare their prices and try to negotiate a better rate.

Mortgage term

You should consider short-term mortgage over an extended period type of mortgage. As an incentive, short period mortgages have a lower interest rate. You will also be paying a significantly higher principal amount for a short-term mortgage vis-a-vis a long-term mortgage.

Extra payments

If possible, make an effort of making extra payments. These will go a long way in reducing your principal amount. This means that your remaining mortgage balance will drop, which reduces the amount of interest payable. When buying a house, every coin saved will go a long way in ensuring that you meet your financial obligations hassle-free. It will also ensure that you have your much-needed peace of mind during this journey of home ownership.
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