Your mortgage is likely one of your biggest monthly expenses, so it’s worth making sure you’re not overpaying and missing out on potential savings. Many homeowners pay more than necessary on their mortgage, sometimes by thousands of dollars over the life of the loan, by overlooking certain details.
Here are five key signs that you might be paying more than you need to, and what you can do about it:
Your Interest Rate Is Higher Than Current Market Rates
Mortgage rates fluctuate over time. If your current interest rate is significantly higher than what’s available today, you might be overpaying. Even a small difference (like 0.25%) can add up to tens of thousands of dollars over the life of your loan.
What to do: Check current mortgage rates and consider refinancing if it could mean a lower payment and more interest savings in the long run.
You Haven’t Visited Your Mortgage in Years
If you’ve had the same mortgage for a long time without reviewing it, you might be missing out on better terms. The reality is, your mortgage needs might not be the same as they were just a few months ago. Life changes, and so do financial goals. Taking the time to reassess your mortgage could uncover opportunities to save money and gain more financial flexibility.
What to do: Get a FREE Mortgage Checkup to help determine if your home loan still fits your lifestyle and long-term plans.
You’re Still Paying Private Mortgage Insurance (PMI)
If your home equity has reached 20% or more, you may be eligible to cancel PMI. Many homeowners forget to request removal, and continue to pay for mortgage insurance when it is no longer necessary.
What to do: Find out if you qualify, and make sure to speak with your home loan specialist at AmeriHome to check your current loan-to-value (LTV) ratio and request PMI cancellation.
You’re Not Making Extra Payments Toward Principal
If you have the financial capacity to do so, making even small extra payments toward your mortgage principal can significantly reduce the total interest you pay and shorten your loan term. You can read more about the benefits of making extra mortgage payments HERE.
What to do: Consider refinancing to lower your payments and use your extra savings to pay more toward principal. Also, you can round up your monthly payment, cut expenses to redirect money toward your mortgage, or take advantage of an unexpected financial windfall to pay down your principal.
You’re Missing Out On Tax Deductions
Homeownership may come with tax perks, like deducting mortgage interest or property taxes. If you’re not taking advantage of this, you could be missing out on valuable savings.
What to do: Talk to a financial or tax advisor (and appropriate government agencies) for more information on how owning a home might affect your taxes or government benefits.
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*As a member of the AmeriHome family, borrowers are part of the AmeriPurchase+ program and qualify for a $750 lender credit for all of your home purchases done with AmeriHome, for any property you own. Credits will be applied only if your loan closes with AmeriHome. This offer can not be combined with any other offers and is not applicable for FHA Streamline, or VA IRRRL Refinance transactions. Other restrictions may apply. Terms and conditions are subject to change. The AmeriPurchase+ program is subject to termination without notice.
