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- Get rid of your PMI: PMI is the lender’s protection in case you default on your loan and cannot make your payments. Typically borrowers that can’t put down at least 20% are required to have PMI since they are seen as a riskier investment. If you live in an area that has seen rising home prices and have been in your home for at least 2 years, speak with your lender about dropping your PMI. This can save you an average of $195 a month for a $200,000 loan.
- Lower your PMI: In January 2015 the government announced lower PMI rates for buyers with FHA loans. New homebuyers will be able to take advantage of these lower rates and existing homeowners may be able to refinance and lower their PMI rate.
- Refinance: Refinancing to lower your PMI is not the only way to refinance your loan. Taking advantage of lower mortgage rates or switching from a 15 year loan to a 30 year loan can save you thousands of dollars. Speak with your lender to discuss options available to you.
- Buy down your rate: If you are purchasing a home, speak with your lender about the possibility of buying down your rate. If you are able to, putting down more money initially to buy a lower interest rate can save you a substantial amount of money over the course of the loan.
- Find a tenant: If your home has an extra room, especially with a private entrance, consider taking on a tenant.