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Reduce Your Mortgage With Insurance Changes

Lowering Your Monthly Payments

If you’re not thrilled with your current monthly mortgage payments, there’s a lot you can do to change that. Don’t feel stuck with a payment structure you don’t like! Let’s take a look at a few of the things you can do.

Another way to reduce your monthly mortgage payments is to see what secondary costs you can reduce or eliminate. Are you carrying private mortgage insurance (PMI)? If so, you’re probably aware that you can ask to have it canceled after reaching an 80 percent loan-to-value ratio on your remaining mortgage balance vs. the current value of your home.

With the instability of home values in recent years, many people are overlooking this option. However, if you haven’t checked into home values in your neighborhood lately, you might be pleasantly surprised. Values in some areas have recovered fairly well, so you might be able to cancel private mortgage insurance sooner than you think. Checking recent sale prices of nearby homes should give you a good idea of whether it might be worthwhile to check into canceling your PMI.

Another option is to take a close look at your homeowner’s insurance. What are you paying for? Are you overinsured for certain aspects of your insurance? If so, modifying your coverage can save you a few bucks. You can shop your policy around to other providers to get their advice on what you’re over-covered for or what your current policy may be missing.

Some insurance experts suggest changing homeowner’s insurance providers every few years, owing to the way such insurance is often marketed. Insurance companies sometimes give you a cheap policy right off the bat to get you signed up, then quietly raise your premium over the coming years. In that situation, switching to another insurer can get you back to the new customer rate. Just make sure your new policy doesn’t scrimp on important parts of your coverage as a way of reducing the premium.
– via MortgageLoan.com – Rates, News & Advice Since 1995

Other Mortgage Options with Insurance

Your lender won’t always give you every option, which is why doing research like this is such a smart choice. There are other options with your insurance that might not be offered unless you ask for them! Here’s how it works!

If you have an escrow account, part of your payment each month goes to cover your homeowners insurance. This is pretty vital coverage, don’t get me wrong, but there are ways to make it cost a little less without noticing a significant difference in your quality of coverage. The easiest is to go out and get new quotes from different insurance companies — this is pretty straight-forward. Buy the policy with the best price and comparable coverage and drop your old one (but don’t forget to tell your lender, because they get really touchy if they think you’ve dropped your insurance completely).

If you like your insurance company and don’t want to switch to another provider, you can still shave off some costs by re-evaluating your coverages. Are you insuring items that are no longer in your home, like jewelry you’ve sold or gifted? Have you added a security system or other safety items that might reduce your home’s risk? When anything in your home changes, you should be informing your agent to keep your policy current. The same goes for your memberships in professional associations or clubs, you’d be surprised the discounts you get for just being a member of the National Association of Realtors, for example. Always ask about discounts — the worst thing anyone can tell you is no.

Adjusting your structure’s coverage is a little touchier, but is definitely something you need to address. If you can afford a higher deductible, raising yours will reduce your insurance premium. The same goes for what you insure — ask your agent if your structure and lot are both covered. The problem with lot coverage is that even if your house burned to the ground, your lot would still be there for you to sell or rebuild upon as you choose. There’s not much your insurance company is going to do for your lot, drop that coverage and you’ll save a few dollars.
– via U.S. Mortgage Calculator

What have you done to lower your monthly mortgage payment?

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