Source: Tulsa World
Publication date: May 10, 2009
By PHIL MULKINS
Dear Action Line: What are some ways to bring down mortgage payments without refinancing? -- L.T., Broken Arrow.
Bankrate.com is a good source of information on everything from credit card rates to mortgage rates. Here are its tips on saving money on your mortgage and your house.
Pay extra: Try to pay extra on your house payment, at least until you reach an "80-percent LTV" (loan-to-value ratio) at which point you may drop your private mortage insurance. PMI is 0.5 percent of principal annually. If you have an 80 percent loan of $132,000, 0.5 percent PMI for $132,000 is $660 per year ($55 per month). The Homeowners Protection Act of 1998 requires lenders to tell buyers at closing how many months it will take to reach 80 percent LTV. Lenders must automatically cancel PMI when LTV reaches 78 percent.
Check with your lender to ensure there is no penalty for paying down your principal and pay extra on your mortgage, noting that amount is toward the principal. Make an extra annual payment. If you are on a 26-pay-period schedule at work make an extra payment in the months with three paychecks.
House wise: Sell that big house if you're not filling it up and don't buy more house than you need. Buy an affordable townhouse or smaller home if everyone but you has moved out.
Room to rent: If you'd rather not sell the old homestead but have way too much space, rent out a room in your home to a friend or st...
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