Your REALTOR® is working hard to negotiate the best deal possible for you knowing it’s expensive to buy a home and equally expensive to borrow towards this purchase. It may seem like these are fixed costs—with no chance of changing—but you’d be wrong.

Did you know there are several things you can do after your REALTOR® negotiates the deal to boost your savings? With a few clever strategies, it’s possible to reduce your monthly mortgage payment—reducing the overall cost of your home.

Possible savings can be found by rolling certain costs into your monthly mortgage payment. Costs such as:

• The expected monthly mortgage payment.
• Homeowner’s insurance and property taxes.
• Any applicable Private Mortgage Insurance (PMI). A loan requirement if your down payment is less than 20 percent of the purchase price.
• Any applicable homeowner’s association (HOA) or community association fees.

Any one of these can possibly be lowered.

Lowering Your Monthly Mortgage

1. Select a less expensive home.

One of the biggest ways to cut the cost of a mortgage payment is purchasing a less expensive home. If the overall price is lower, your monthly payments will be lower. This makes sense. This also may allow your savings funds to stretch farther so you can make a larger down payment.

2. Raise your credit score.

Lender’s fees are directly tied to your credit score rating. The higher your score, the lower your loan fees will be. Don’t open any new credit cards if you’re planning to purchase a home. Pay off as many lines of credit as possible and always make payments in a timely manner. It’s recommended to keep your balances below 15 percent of your credit limits to maximize your credit score.

3. Avoid the PMI.

The most obvious way to avoid paying for Private Mortgage Insurance (PMI) is to make a down payment of 20 percent or more when purchasing the home. Homeowners who borrow more than 80 percent are required to pay for private mortgage insurance. Having a larger down payment subtracts the added insurance fee from your monthly payment. Note: FHA loans will require mortgage insurance regardless of the amount of your down payment. With an FHA loan the insurance is usually required for the lifetime of the loan.

       4. Extra mortgage payments.

Any extra mortgage payments you are able to make, whether a one-time payment here and there or regularly making extra payments, will have an impact. If you pay an extra $1,000 the balance of your loan will be $1,000 lower than it would have been for every remaining month of the loan. Use funds from your tax refund, from gifts, or an inheritance towards the mortgage loan. It all adds up!

        5. Decrease your property taxes.

Because many have their tax payment lumped into their monthly mortgage payment an adjustment to the taxes can decrease a monthly payment. If you feel your home is worth less than an assessor says request a review. If the new review confirms the reduced value your lender should adjust your payment amounts.

       6. Compare insurance rates.

Lenders have minimum requirements for homeowner’s insurance. If you feel there are savings to be had than do your due diligence and shop around for a new policy. The insurance plan you opened when you bought your home can be re-evaluated over the course of the 30-year, 15-year, or 10-year loan. Insurance rates vary. You may be surprised the savings waiting for you if you look into this.

7. Modify your loan.

It’s possible to qualify for loan modification if you are late with your payments and going through tough financial times. Additionally, you may qualify for a reduced interest rate, for forgiveness of part of the principle, or for an extended loan. For information about modifying your loan, contact your mortgage service provider.

Give us a call or drop us a line if you would like a better understanding for one of these savvy savings tips. We’re here to help.

Hillary Gaynor has real estate listings spanning the New Hampshire seacoast and Southern Maine area. The Bean Group has listings in Maine, New Hampshire, Vermont, and Massachusetts. Hillary is happy to refer anyone outside her area to a trusted agent in her extensive network. Helping you find a good neighborhood is what we do. We pride ourselves in knowing the communities and guiding buyers towards their future homes. Schedule an appointment to get started.