A mortgage is just a huge financial commitment—likely the biggest you will ever make. So, it makes sense that you'd might like to do everything in your power to save money in your mortgage. After all, the more income you are able to save now, the more financial freedom you can have down the line. Here certainly are a few secrets to saving tens of thousands of dollars on your absolute best 5 year fixed mortgage rate.
Secrets to Saving Money on Your Mortgage
1. Get Pre-Approved for a Mortgage
This could seem just like a no-brainer, but far too many homebuyers skip this crucial step. By getting pre-approved, you'll know exactly how much cash you have to work well with and can avoid overspending in your dream home.
2. Shop Around for the Best Mortgage Rate
In regards to securing a low-interest rate, it pays to shop around. Ask each lender about their current rates and compare them side-by-side before creating a decision. Remember, even a tiny difference in interest rates can add up to big savings over time—so it's definitely worth taking the time to compare rates from multiple lenders.
3. Leave behind the Private Mortgage Insurance
PMI is definitely an insurance plan that protects the lender in the event of default, but it's an additional expense that doesn't do anything for the borrower. Once you've built up 20% equity at home, you can cancel your PMI policy and start pocketing that more money each month.
4. Make Biweekly Payments
Making biweekly payments as opposed to monthly payments can assist you to save serious cash over living of one's loan—and it's easier than it sounds. When you make biweekly payments, you are essentially making one extra payment annually without even noticing it. That will not seem like much, but those extra payments can add up quickly—causing big savings down the road. If you're unsure how to create biweekly payments, just ask your lender—they ought to manage to help you out.
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