Buying your first home is quite the event, and most families strive toward this big purchase as one of their main goals, likely due to how important it is to be a homeowner in this day and age.
However, financing your home usually means that there’s a mortgage tied to it, and making those payments can be fairly tough for the average American family.
With the cost of living rising through the roof, even the most basic things are slowly becoming unaffordable, and the same can be said for your mortgage payments, which have likely become an incredible burden on your finances.
That being said, completing your mortgage payments means you’ll be saving yourself a load of money in the long run, and we’re going to try and give you some tips on how to optimize these payments in a way that won’t put too much pressure on your financial security.
Make an extra payment once every quarter
The math is simple, so long as you keep adding more money to your mortgage payments, more of it will go toward the principal balance, effectively reducing the amount of interest rates you’ll be paying years down the line.
Realistically though, you can’t just double your payments every month, as you’ll drain your finances too fast for your income to keep up, putting yourself in a situation where you’re forced to take out a loan, which comes with its own interest rates and monthly payments.
However, throwing some extra money at your principal balance once every 3 months is an incredible way to make these contributions, as you’re bound to save up enough over the duration of one quarter to make that extra payment.
Once you’ve got your principal balance close to 80% of the home’s original value, you can even apply for the removal of PMI, which shaves nearly 11 years off your mortgage.
Make your own lunch
Even if it sounds a bit far-fetched, bringing your own lunch to work can make a huge difference in terms of how much money you’ll be working with every year.
Studies have shown that the average American can save up to $1200 every year by just bringing their own, home-cooked meals to work rather than eating out.
By doing this, you can easily take off several years from your mortgage, all while also enjoying your or your spouse’s cooking during break time at work.
This is one of those things that doesn’t have a real downside, and unless you’ve got absolutely no time to eat something that was cooked at home, there’s nothing stopping you from saving yourself upwards of $10 every day in food expenses.
Downsize your living arrangement
Even though some mortgages don’t allow you to sell the property within a given amount of time, most borrowers are fine with you selling the home, so long as they’re making money off of your investment.
Selling your home and opting for a smaller one before you even complete your mortgage payments is a common strategy most homeowners resort to, and it’s particularly popular due to the amount of excess money you’re left with.
By doing this, you’re essentially swapping your current mortgage for a smaller one, which in turn means that your payments will be smaller as well.
Most experts will direct you towards VA loans, which are managed by the US Department of Veterans Affairs, as they offer the best terms, although they tend to be a bit more expensive than your conventional loan.
Consult with the pros
A second opinion goes a long way, and if you haven’t been in the housing market previously, it may be for the best to leave the decision in the hands of an expert.
On top of this, finding a home is a process that isn’t recommended to a newbie in the market, mainly due to the countless hours of sifting through homes only to find the one that’s best suited to your needs and wants.
By using the Endorsed Local Provider network, you can gain insight into some of the best real estate agents in the area, giving you something to go off when deciding who to trust when it comes to buying your first home.
By making use of ELPs, you can guarantee that you’ll be getting top-level service without having to expose yourself to the risk of buying a home that doesn’t fit your budget or your future plans.
Paying off a mortgage can put quite a dent in your finances, so much so that the average American family is no stranger to having struggles related to their mortgage payments.
However, by implementing some clever thinking and sensible money management, you can maximize the value you’ll be getting out of every dollar dedicated to your home, and this is akin to guaranteeing a victory for yourself in the long run.