5 Lesser-Known Tips to Help You Save Money on Your Mortgage
by Dan Wolf
on Monday, June 23rd, 2014 at 5:26am.
If you are a first time home buyer in the market for a mortgage or are looking for ways to save money on your existing setup, you should know that having a low rate isn't the only way to save money. Sure, it's helpful, but there are a multitude of programs and strategies designed to offset costs that, when done right, work even better than just negotiating rates. All it takes is little savvy and know-how.
1. Borrow From Your Bank. Loyalty can go a long way. So if you already have a checking or savings account, a student loan, or have borrowed from them in the past, it could be very beneficial for you to borrow from your banking institution. And the best part, many times current customers get rate discounts.
2. Job-Based Mortgage Discounts. Depending on your chosen profession, you may be able to get a mortgage discount. If you are a teacher, firefighter, or police officer, do some research for discounted mortgage rates aimed directly at your profession. State organized programs often have special programs for first time home buyers, police, fire-fighters and teachers, as well. Many lenders like to reward those who commit to public service.
3. Try for a Mortgage Credit Certificate (MCC). The MCC program is designed to help first time homebuyers offset a portion of their mortgage interest when applying for a new mortgage, a simple solution that could save you big time in the end. To see if your Anchorage community has a program available to you, ask us and we can help you.
4. Borrow for Closing Costs at Zero APR. Avoid letting your closing costs merge into your mortage. If you do, you'll be paying on them for as long as you have the loan. Instead, borrow the money at zero percent by putting the costs on a credit card with an introductory rate of zero percent (finding one that has an extended rate is even better), then pay them off before the rate jumps.
5. Private Mortgage Insurance (PMI). When you owe more than 80-percent, PMI is required. But a way to avoid paying PMI is to get a piggyback loan that carries at least 20-percent of the house's fair market value, while the primary carries 80 (hence why it is called an 80/20 loan). A loan of this nature can serve as a downpayment and help you reach enough equity to do away with the PMI.
For more information on how we can help you, please don't hesitate to contact us for more information.