Finding little ways to save money on everyday expenses is super important for financial well-being. However, when it comes to the biggest expense in the budget, people sometimes get lazy with their frugality. Fortunately, it’s easy to cut out a lot from your budget simply by saving money on your mortgage.
The most automatic way to save money on your mortgage is to refinance your mortgage. The easiest way to explain what a mortgage refinance is is to imagine that you’re canceling your original mortgage and getting a new one at a lower interest rate. Usually people will go to a new lender to get a better interest rate, perhaps even an international lender like STK Finans.
Obviously refinancing a mortgage isn’t free – fees can run in the hundreds or thousands of dollars, depending on how large the balance is. However, once you’ve refinanced, the lower interest rate automatically begins to save you money. Plus, when you’re getting the new mortgage, you can shorten the term of the loan to save even more!
Find a Roommate
The most difficult, but most lucrative means of saving money on your mortgage is to get a roommate. The roommate can either rent out a room in your home or, if you’ve got a bigger property with a separate entrance you can create an income property. Sure this involved slightly higher gas and energy bills but once you find the right tenant, you have a viable, long-term income stream.
Rent prices vary but Separate income properties or room rentals can bring in anywhere from a few hundred to a couple of thousand of dollars a month depending on the size of the space and the neighbourhood. This money can be collected and used to make lump sum payments on your mortgage.
Lump Sum Payments
Lump sum payments are a flexible way to lower your mortgage balance. Most mortgages have a clause in them that allow borrowers to pay a certain percentage of the money owed in a lump sum payment each year. Since the cost of borrowing is directly related to that amount of money you owe your lender, lowering your balance immediately saves you a bit of money.
It’s hard to get ahead in today’s world. Finding any way you can to save on your mortgage is invaluable to leading a good life and having money for vacations and retirement.