4 Other Ways to Save Without Refinancing

Refinancing a mortgage is a popular way to reduce monthly payments and save on interest, but it's not the only option. Here are four other effective strategies to save money without refinancing your mortgage.

1. Make Biweekly Payments

Instead of making a single monthly payment, consider splitting your mortgage payment in half and paying every two weeks. This results in 26 half-payments or 13 full payments over the course of the year, which is one extra payment annually. This strategy can significantly reduce the principal balance faster, saving you money on interest over the life of the loan.

• Example: For a $200,000 mortgage at 4% interest, making biweekly payments could save you approximately $23,000 in interest and shorten your loan term by four years.

2. Reassess Your Homeowners Insurance

Review your homeowners insurance policy and shop around for better rates. Insurance premiums can vary widely among providers. Ensure you have the necessary coverage without overpaying for additional features you might not need. Bundling your homeowners insurance with other policies, like auto insurance, can also lead to discounts.

• Example: Switching to a more affordable insurance plan could save you hundreds of dollars per year, adding up to thousands over the life of your mortgage.

3. Appeal Your Property Taxes

If you believe your property has been overvalued by the local tax assessor, you can appeal your property tax assessment. Lowering your property taxes can directly reduce your monthly escrow payments, leading to significant annual savings.

• Steps to Appeal:
• Gather evidence of comparable property values in your area.
• File an appeal with your local tax assessor's office.
• Attend a hearing, if necessary, to present your case.
• Note: Success rates and processes vary by location, so check local guidelines.

4. Extra Principal Payments

Making extra payments directly towards the principal balance of your mortgage can reduce the overall interest you pay and shorten the loan term. Even small additional payments can have a substantial impact over time.

• Example: Adding just $100 extra each month to a $200,000 mortgage at 4% interest could save you over $27,000 in interest and pay off your mortgage almost five years earlier.

Conclusion

While refinancing can be a great way to save on your mortgage, it's not always the best or only option. By making biweekly payments, reassessing your homeowners insurance, appealing your property taxes, and making extra principal payments, you can effectively reduce your mortgage costs and pay off your loan faster. Consider these strategies to find the best fit for your financial situation.