How to Save Money on Your Mortgage Loan: Buying a home is likely one of the largest financial purchases you’ll ever make, and financing those purchases through a mortgage loan can be tricky.
Get a Free Mortgage Calculator
A mortgage calculator lets you plug in numbers, such as how much you make, how big your down payment is, and what your interest rate is. By changing any of these figures and seeing how they affect your monthly payments, you can see which combinations make sense for you. To save money over time, it’s a good idea to look at a range of loan terms; doing so lets you compare mortgages based on their annual percentage rates and total costs. For example, if one loan carries an APR of 4 percent but will cost 10 percent more overall because it’s shorter in duration, that may be worth it if you plan to pay off your loan quickly.
Get an Instant Estimate
There are a lot of free mortgage calculators out there, but not all of them will give you an instant estimate—sometimes it takes hours or days before you can figure out how much house you can afford. If you’re in a hurry and want to save money when buying your home, check out LendingTree’s free mortgage calculator. They’ll run an automatic calculation that’ll save you time and get your savings going. It may not seem like a big deal now, but saving just $500 on your mortgage over 30 years is worth more than $50,000 today!
First Time Home Buyers
When you’re buying a home for the first time, it can seem overwhelming trying to find your way through all of that information. The web is a great resource, but it’s hard to tell what’s helpful and what isn’t. If you want help choosing a mortgage calculator and navigating your home loan—along with lots of other resources and advice—check out First Time Home Buyers. First Time Home Buyers will teach you everything from how much house you can afford, how much your monthly payments will be based on different interest rates, and whether or not now is a good time to buy in your market (and more). Check out First Time Home Buyers today!
Cash-Out Refinance
For some people, refinancing their mortgage is an option if they want a lower interest rate. However, not all refinancing options are created equal and some can increase your monthly payment. The FHA streamline refinance program is designed for first-time homebuyers who have been in their homes for at least two years. It lets you avoid paying many of the closing costs that you would normally face when refinancing into a conventional loan. It also has a simplified underwriting process, which means borrowers can get approved in as little as one day instead of waiting weeks or months. With rates starting at 3.5%, it’s worth looking into if you’re thinking about switching lenders or saving money on your existing loan.
FHA Streamline Refinance
This type of refinancing offers homeowners a quicker, easier way to get a lower rate. Under an FHA streamline refinance, you can switch from a conventional loan to an FHA loan while avoiding underwriting requirements and getting full credit for points already paid at closing. It’s one of the easiest ways for homeowners with good credit scores (680 or higher) and adequate equity in their homes (at least 20%) to save money on their mortgages. The application process is fast, easy, and free. You don’t even need your most recent tax return or pay stubs because your income is automatically verified through electronic data sources when you apply online.
Low-Interest Rate Refinance
With interest rates hovering near historic lows, now is a great time to consider refinancing your mortgage. Whether you have good credit or bad credit, you can save money on your mortgage loan by switching from a variable-rate loan to a fixed-rate loan. The best thing about refinancing is that it’s flexible; you can choose how long you want your home loan for, meaning if you don’t want monthly payments for 10 years but do want them for 7 years, that’s fine too. By visiting RateSupermarket.ca and entering some basic information about yourself, your new loan interest rate will be calculated within seconds.
VA Interest Rate Reduction Refinance
The VA Home Loan offers several benefits and special options for veterans who are looking to refinance their existing mortgage loans. One such option is called an Interest Rate Reduction Refinance (IRRRL), which is a fancy way of saying that you can reduce your interest rate by refinancing your loan. Interest rates change all of the time, but they tend to fluctuate more frequently after large economic events such as recessions and wars. For example, interest rates were at historic lows during most of 2014 due to good economic conditions and low inflation throughout much of the world. However, when inflation spiked in 2015, many economists believed we were nearing or entering another recession in 2016.
Conventional Interest Rate Reduction Refinance
If you want to reduce your interest rate and monthly payments but don’t have equity in your home, a refinance is an option for lowering monthly mortgage costs. But most lenders will only consider refinancing conventional loans. In other words, even if you’re paying 7 percent and want something closer to 4 percent, not every lender will help you. This might be a viable option if you’re looking at 30-year mortgages with less than 20 years left before term expiration.
Is there a Down Payment?
The amount of your down payment is one of the most important factors in determining how much money you’ll be able to borrow for a mortgage or other loan. Before you shop around for loans, make sure you have an idea of how much money you can save for a down payment by checking out our handy 1% down payment estimator below. Input some basic information about yourself and where you plan on living, then use our calculator to see what kind of mortgage loan you’re eligible for. Our calculator will also show whether making a larger down payment could help qualify you for more home loan options!
List of Mortgages and Loans Available
A down payment of 1% on a $300,000 home loan can save you hundreds—if not thousands—of dollars per month. To figure out how much money you’ll need for a down payment, use our mortgage calculator’s handy percentage calculator! It will help you determine what one percent down payment translates into in dollar terms. The total cost of your mortgage will be roughly 3% higher than your initial loan amount; by putting just 1% of that initial loan amount toward your down payment (instead of 3%), you could end up saving thousands over time! Be sure to consider closing costs and moving costs as well.
Down Payment Estimator for Mortgages & Loans (1%)
By using a mortgage down payment estimator, you can figure out how much of a loan and down payment you can afford. How much money do you have available for a home purchase? The answer is not as simple as it might seem. There are many other financial factors to consider, such as retirement savings, current assets, and debt levels. Mortgages make up an extremely large portion of household debt in most countries; in Canada, that portion is over 70%. Maintaining good credit scores while paying off your mortgage quickly will help you save more than just interest—it’ll also help get you better rates when your next home purchase rolls around.
