Who doesn’t want to save money on their mortgage?
Of course – everyone does.
That is why when looking to buy a home or thinking about refinancing, you try to shop around to find the lender with the lowest rates and best fees. Finding a lender with the lowest rates is one way to save money on your mortgage payment each month – but there are other things that you can do to save money each month.
Your monthly mortgage payment is made up of different things: Principal, Interest, Taxes and Insurance. PITI is a common way for people in the real estate world to describe it.
Principal and Interest. The amount of principal and interest that you pay each month is a math calculation that arrived at using the interest rate of your mortgage note, the principal amount of your loan and the number of years your mortgage is amortized for.
Taxes. There may be an opportunity for you to save money each year on taxes if your property value has gone down. If your property value has gone down and you think that the county assessors office has not accurately reflected this in your tax bill, there are processes in place where you can appeal the amount of taxes that are to be due.
Insurance. There are two types of insurance: homeowners insurance and mortgage insurance. The best way to save money on your homeowners insurance rates is to shop around for cheap insurance quotes. You might be surprised how much you can save just by making a few phone calls.
The best way to save on mortgage insurance is to work toward getting enough equity in your property that the lender will no longer require it on your loan. If you have a conventional loan, ask your lender what it would take to get rid of your mortgage insurance. Don’t wait for your lender to contact you about this – I haven’t ever heard of a lender who calls their customers and proactively informs them how to stop paying mortgage insurance.
When shopping for a mortgage, it is a great idea to shop for the lowest rates because that will help you save money on the “PI” part of your monthly payment. Don’t forget to shop for the “TI” part as well – you might be surprised how much you can save!
Arizona Mortgage Rates for March 27 2009
{ 1 comment }
Interesting tips. I just bought a house, so I’ll have to bookmark this. Thanks!
- Kuy,
Programmer, Clinical Trials Software
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