Home ownership is a part of the American Dream. It offers stability and is a great investment opportunity. When the costs of other items like gas & food eat into your budget, a mortgage payment can also feel like its eating into your hard earned money. The once fulfilling-endeavor of owning a home can feel more like a ball and chain. But it doesn’t have to be this way! Your mortgage payment is usually your largest monthly expense, while also being the most fulfilling. But before you let all the stress of rising costs get you down, learn how to save money on your mortgage by decreasing your monthly mortgage payment today.
If you are interested in saving thousands of dollars on your mortgage next year, this article is for you! I am going to explain exactly how you can save money on your mortgage today to reduce mortgage stress and give you a cushion for all the other expenses in your life. Read on to learn more!
Private Mortgage Insurance
Did you put 20 percent down when you purchased your home?
If you didn’t, you most likely have what’s called PMI (Private Mortgage Insurance). PMI is exactly what it sounds like – an insurance that covers your mortgage company in case you don’t make your monthly payment. Because you didn’t put 20% down, the mortgage company considers your lack of equity as a riskier loan. In other words, it’s a requirement to ensure you are covered properly. And guess what? – That money is not paying down your principal or anything else that has to do with your loan. Instead, it is strictly and purely another insurance.
Note that, if you don’t default on your loan, it never needs to be used, it is simply gone – or non-existent. The insurance does not cover you, it covers the bank. The good news here is now that prices of properties have gone up so much in the past few years, you may already have more than 20 percent equity stake in your property. And if you do, the PMI could potentially be removed, saving you hundreds of dollars a month. There are a few additional steps you have to take to get it removed, and we’re more than happy to point you in the right direction.
Saving money is possible, it just takes a little knowledge of the system and the options available to you.
Steps To Remove the PMI
How can you save money on your mortgage today? Let’s break it down.
Contact Your Lender
First, contact your lender. Learn the steps to get the private mortgage insurance removed (and the steps to refinance if that’s an option). Keep in mind that the federal Homeowners Protection Act (HPA) provides rights to remove Private Mortgage Insurance (PMI) under particular circumstances, that you may be eligible for. The law generally provides two ways to remove PMI from your home loan: (1) requesting PMI cancellation or (2) automatic or final PMI termination. Make sure you receive a full breakdown of the PMI cancellation/termination process from your lender and ensure the removal follows through. Remember that each servicer(mortgage company) has its own guidelines, so there’s no one size fits all approach.
Check On The Equity Of Your Home
The second step will most likely be an appraisal. Expect the cost to be anywhere from $500 up to $700. The appraisal will tell the bank the actual value of your home, and the bank will run calculations to see if you have over a 20 percent equity stake in your property. What does this mean? You could potentially save hundreds of dollars each month – So don’t wait to find out; start saving today!
Find Out The Value Of Your Home Today
If you’re interested to see what the value of your home is, and to see if you should even move forward with contacting your lender – let’s connect! I would love to run those numbers for you and help you determine your next steps. I can make this process easy for you while eliminating the stress of jumping through hoops to gain the information you need. So contact me, and let’s get started! You can begin saving more money every month today!