Purchasing a home is one of the most rewarding and expensive decisions you can make. Becoming a homeowner is a milestone that is highly regarded by many, however, the thought of paying off your mortgage when you are settled into your new home can be daunting.
You may be wondering: How can I pay off my mortgage while saving money? If this thought seems impossible, you are not alone.
Making regular payments to your mortgage while leaving room for other expenses such as home repairs and utilities can be a lot to juggle, but nothing you can’t do with the right guidance and tips to get you started.
If you've ever wondered how you could possibly save money while paying your mortgage, continue reading to learn a few money-saving strategies to help you reach your savings goals faster while continuing to pay your mortgage.
1. Set a Savings Budget
Although it may appear simple, many people fail to meet their savings goals because they never set an actual savings budget prior to saving. As a result, their saving habits end up being inconsistent as they do not have a concrete plan in place to guide them.
That is why we recommend starting off with a savings budget that clearly outlines your end goal and the various expenses along the way that you will need to contribute to as you navigate your financial journey.
A budget is essential for setting realistic and attainable savings goals for yourself. To keep track of all your income and expenses each month, you can use an online app, a spreadsheet, or another budgeting tool.
And remember to add your mortgage payments to your budget!
2. Additional Mortgage Payments
Adding additional mortgage payments to your monthly plan not only helps you to save money in the long run, but reduces the length of your mortgage. For many who plan on making payments during their retirement years, this is a huge relief.
As well, many lenders offer options that allow you to make additional mortgage payments without incurring penalties. You will need to check with your mortgage lender to see what options are available for you.
Even the smallest increase each month makes all the difference. If you are unable to stay on track with the increased payments due to circumstances beyond your control (such as unemployment), you can apply any extra money from your savings plan to your mortgage.
It’s truly that easy!
3. Consider Mortgage Refinancing
If the interest rates are low, it is a great opportunity to refinance your loan. In the long run, this will help you to save money while paying off your mortgage.
The money you save on monthly payments can then be used to help you reach your savings goals more quickly. And as mentioned before, a little goes a long way!
4. Monitor Your Expenses
As a homeowner, you will want to keep a close eye on your expenses each month in order to reach your savings goals and pay off your mortgage entirely.
If you have implemented the savings budget we mentioned previously, it is important to check in on it every so often to ensure that you are on the right track and any additional income is going where you ideally want it to go.
A new car or a brand-new iPhone may sound nice, but does it fit into your savings plan at this moment?
Your budget can help you determine how much more you can spend realistically while still meeting your savings goals.
Arise Mortgage is Here to Help You Reach Your Goals
While it may appear difficult at first, lowering your mortgage payments is very possible with the right guidance.
With an expert in your corner and strategic planning, you can save money while paying off your mortgage.
Interested in learning more? Get in touch with our team today to further discuss how you can pay off your mortgage while saving money. We’d be more than happy to help!