6 Ways to Lower Your Mortgage Bill

Before moving into a cheaper house, there are some things you can do to cut that big mortgage obligation. Most mortgage payments are made up of four parts: principle, interest, taxes and (homeowners) insurance. Lowering any one or more of these of components is worth considering.

Refinance at a Lower Interest Rate

Sometimes it's better to refinance your loan at a lower rate -- even if your monthly payment is higher -- in order to cut the amount of money you will ultimately pay the bank.

You can also restructure the loan from a 30-year to a 15-year. Your monthly payment will be higher, but you'll cut the total number of years of making payments.

"This will save money in the long run," said Holden Lewis, senior mortgage analyst at Bankrate.com in Palm Beach Gardens, Florida.

Shop Around for Homeowners Insurance

"It's a good idea to periodically shop around for a lower premium," Lewis said.

He also mentioned making some improvements to your home that could make you eligible for a discount. For example, homes in hurricane-prone areas can be reinforced with special hurricane-resistant glass and roof reinforcements to better protect the home and qualify for a lower quote.

Grieve Your Tax Bill

You can do it yourself or hire a company to petition your town for a lower tax assessment.

Make an Extra Mortgage Payment Each Year

According to Lewis, if you take one-twelfth of the principle and interest portion and add that to each monthly payment, you'll be making an extra payment every year which will help reduce the total number of years of the mortgage.

Recast Your Mortgage 

Rich Zito, co-founder of Flynn Zito Capital Management in Garden City, New York says "If you like your bank, you can ask to recast your loan at a lower rate." He said it depends on the bank and other factors, but it's worth looking into.

Eliminate PMI Insurance 

If your original down payment was less than 20%, you've probably paid PMI insurance. "But if you have more than 20% equity in the home, you no longer need PMI insurance, and you can petition the bank to eliminate it," Zito said.