New Year, New Mortgage: Setting Homeownership Resolutions

By: techdev | 3 Jan 2024

New Year, New Mortgage: Setting Homeownership Resolutions.

The standard rule of thumb is that housing costs should not exceed 28% of your gross income. However, given increased market demand driving up prices and interest rates lingering between 7-8%, many Americans have found their mortgage payments consuming much more of their gross income. This doesn’t have to be your reality for the next 30 years. In this article, we’ll help you uncover homeownership resolutions you can implement to change your mortgage situation going into 2024.


Consider Refinancing 

Mortgage rates are finally on a downward slope. With the Federal Reserve confirming three projected rate cuts, many economists are predicting rates to fall to the low 6s. If you took out a mortgage in the past two years, this rate might be much lower than your current rate. 

This presents a great opportunity to lower your mortgage payment in 2024 and free up extra cash. Determining the right time to refinance can be difficult, especially as future cuts are expected. Reach out to a lender at Texas Republic Bank to learn more. 

Make Extra Principal Payments

Each month, your mortgage payment is comprised of principal and interest. Paying the exact amount due pays down your loan according to your loan timeframe, which is generally 30 years. By adding on an extra $50 or $100 each month, you can pay down your principal directly, saving you thousands of dollars in interest and reducing your loan term. 

When it comes to making extra principal payments, be sure that the amount is applied to your principal and not recorded as prepaid interest. If you are confused about how your extra payment is applied, contact the company that manages your mortgage. 

Remove Private Mortgage Insurance

Private mortgage insurance, known as PMI, is an extra charge added to your mortgage when you put less than 20% down. PMI can be removed from your loan when you owe less than 80% of the value of your home. Let’s say you recently renovated your home, increasing the value by $50,000.

If your home’s original fair market value increases from $300,0000 to $350,000, and you only owe $275,000 on your home, you can request PMI to be removed. In most cases, your lender will need to receive an independent appraisal report to remove PMI. Nevertheless, this can be a great way to lower your monthly payment as the value of your home increases. 

Talk to Your Insurance Agent

Insurance is usually worked into your monthly payment. Talking with your insurance agent about ways you can lower your annual premium is another excellent homeownership resolution in the new year. Maybe you can take advantage of bundle discounts or decide to switch carriers. Whatever the case, schedule an appointment with your insurance agent to discuss your homeowner’s insurance policy and how you can lower your costs. 

Getting Started

Which of these four homeownership resolutions sounds like a good fit for you? You might find that you can benefit from a few of these strategies. Getting started relies on understanding your mortgage situation and ways you can improve your situation. 

Whether you are interested in refinancing or removing PMI, our team at Texas Republic Bank has you covered. Reach out today to schedule your free consultation with one of our lending experts.


Download the Article: New Year New Mortgage Setting Homeownership Resolutions – Compliance edits v1



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