Calculating Your Mortgage Payment:It's essential to understand that your mortgage payment includes not only the loan principal and interest but also costs like homeowners insurance and property taxes. Exploring ways to minimize these additional expenses can further contribute to lowering your overall payment.

Strategies to Minimize Monthly Payments:

• Shop around for home owners Insurance: Explore various homeowners insurance options to find the best rates, ensuring you're not overpaying for coverage.
• Lower Your Property Taxes: Choose areas with lower property taxes, a decision that can positively impact your monthly expenses.

Other ways to Minimize Monthly Payments: One of the key factors contributing to your monthly payment is mortgage insurance. By understanding and strategically addressing this cost, you can unlock substantial savings.

• Minimum 20% Down Payment: Use builder/lender incentives or savings to put 20% down, you erase the need for mortgage insurance, saving you a substantial amount each month.
• Military Advantage with VA Loans: If you're a military homebuyer, using a VA loan exempts you from the obligation of paying mortgage insurance, providing a valuable benefit to our service members.

Additional Savings Strategies: Beyond the 20% down payment, consider these options to further minimize your monthly payment:

• Put more than 20% down. 
• Buy Down Your Interest Rate: Buying down your interest rate involves an upfront investment to secure a lower interest rate. Here's a simple example to illustrate the potential savings over the life of your loan.

Example 1: No Buy Down:

Conv. Loan, $300,000 home price, 30 year term, 7.0% interest rate = $2,010 monthly payment

Example 2: With $5,820 (2 point) Buy Down:

Conv. Loan, $300,000 home price, 30 year term, 6.5% interest rate = $1839 monthly payment

This is a monthly savings of $171, yearly savings of $2052, and $61,560 over the life of the loan! 

Note: The calculation provided above reflects current average interest rates as of 12/1/2023. It is also mportant to acknowledge that these interest rates are subject to change based on factors such as location, credit score, loan amount, down payment, loan type, and terms. As interest rates fluctuate frequently, this is not a financial quote but is intended solely as a self-help tool for personal use. It is not meant to offer investment advice.

Minimizing your monthly payment is not only achievable but can also have an impact on the size of home you can afford. By strategically eliminating private mortgage insurance, exploring cost-effective insurance and tax options, and considering upfront investments like buying down your interest rate, you can pave the way to a more affordable homeownership journey.

Want to estimate your monthly payment or to determine how much home you can afford? If so, check out our payment/budget calculator tools. Click here! Stay tuned for more valuable insights in our "Keystone Keys to Savings" series to learn more about lowering your down payment and closing costs so that you can maximize your savings!

Want to learn more about how to save on your down payment? Click Here!