I get asked this question all the time. How can I reduce my mortgage cost? As I have said before, real estate has its good side and its hard side. But in the end it is definitely worth the effort you put into your home.

Yes, you can reduce your mortgage in a couple of different ways. It depends on your long term goals.

If your plan is to stay in this house for the long term, then the first way is to pay towards the principle as much as possible. It will not reduce your monthly payment but you will reduce the amount of interest you pay over the mortgage period. I have never calculated it, but if you only pay one additional payment per year you would save thousands of dollars in interest. Plus you will pay the mortgage off sooner.

Refinancing is always an option. This can work to your advantage to reduce your monthly payments. But, it will cost you closing costs because it is getting a new loan on your house. It will take you back to a 30 year term but if you can reduce your payment it might be worth the money and time.

Recasting is another option. Mortgage recasting is when your monthly payments are recalculated based on your current mortgage. If you have sold an investment and have additional cash to apply to your principal, or paid the loan amount down low enough, recasting can reduce your payments and also change the term length of your loan. Refinancing is waived on a recasting of your loan. It is important to talk to your lender when you get your new loan to check and make sure they offer a recasting option. Not all loans allow you to use this option or there are time limits on recasting.

I hope this information has answered some of your questions. You can always call your lender to find out if there are other ways to reduce your mortgage cost. If you have more questions please call me.

And please give me a call if you are thinking of buying or selling real estate.

Mary Ann Edwards – Re/Max College Park Realty – RE Lic 01103542