Housing – Rental Advice & Home Mortgage Savings

Rental Tips and Mortgage Savings.

Our priority at MoneySmartFamily is to help readers improve their finances and we partner with companies that could help you. Some links on this page are from our partners. Read how we earn money here.

This Housing Page contains a growing collection of tips for Rental Advice and Home Mortgage Savings.

Paying off your mortgage takes focus and determination. It is one of the greatest feelings to make that final payment. We hope these tips help you reach the goal of being mortgage free!

 A Down Payment on a House with a Small Income

I just read the “About Us section” and I’m inspired to save money. I cannot believe you were able to put a down payment on a house with an income of less than $35K.
How was it possiblto qualify?

a brown house with a maroon car and a blue van parked in the drive way.

An answer for Your Question

In 1985 our income was about $22,000, and the amount we were borrowing was on $47,000 (the house was a 4 bedroom, repo, fixer-upper listed for $53,000). Plus we had no other debt. We put 15% down, and paid the mortgage off in 9 years. By that time our income increased and we were able to pay much more principal with each monthly payment. Funny thing about it was that we sold the house 9 years later for $79,000 – an amount that exceeded the purchase price of the house plus all of the interest we had paid. Not many people can say that!

The bottom line for us was that we hated owing money, so we managed our spending priorities using the budgeting system we described in America’s Cheapest Family Gets You Right on the Money and in the downloadable audio seminar Managing Household Finances, so that we could live a comfortable lifestyle while decimating the debt.

Great Money Saving Idea

Quoting your Homeowners Insurance or Renters Insurance is a fast way to save money. We use GABI Insurance to get fast and easy comparison pricing.
Just connect your current policy with their quote tool and you’ll be on your way to saving money.



Dealing with an Increasing Home Mortgage Payment

Housing - Renting Advice & Home Mortgages

My mortgage payment keeps going up due to there not being enough in my escrow account. I have never missed a payment but other bills have suffered as a result of the increased monthly amount.

I have recently applied for a mortgage modification. But right after that, I received a letter letting me know I had insufficient funds in my escrow account.  And by the time all is said and done, I’ll be paying what I was when I applied for the modification.  I am a single mom and work a full-time job. There is also another job I work as needed and I still find it hard to make ends meet. I feel defeated.

How to control your mortgage payment

Most mortgage companies include your property tax and homeowners insurance in your monthly payment. They hold the money in an impound account and make the payments to either your county assessor or insurance company when they are due.

If you have enough equity in your home, you can petition your mortgage company to allow you to form your own impound account—accumulating and paying your own property taxes and homeowner’s insurance. We did this because every few years, just before Christmas, we’d receive a friendly little notice that our impound account was deficient.

We could either pay the deficit (usually $400 to $500) or allow our monthly payment to increase by $25 to $30. Our lender simply couldn’t get the knack of dividing our taxes and insurance payments by twelve! We grew tired of receiving their “You owe us $500” holiday greeting card. So we contacted the president of the company and insisted on doing our own impound. To our surprise, they agreed!

Just be aware that to do your own impound you must budget and save and protect that money so it’s there when you need it. This could be the very thing you need to manage your mortgage better!

But if your mortgage payment does go up, consider re-quoting your homeowner’s insurance. Rates change every year and you may be able to offset the increase in your house payment by lowering your insurance.

We like using Gabi Insurance. They have a simple tool where you can connect your current homeowner’s policy and get exact matching quotes from several companies without making a phone call. 

Rental Advice & Helping Maintain a Property

Room for rent sign

I’m renting a room in a house from a laid-off construction worker (“John”).  He doesn’t own the house – he rents the whole house, keeps the whole upstairs to himself, rents out the downstairs bedrooms, and effectively lives in the house for free under full occupancy.

The landlord is okay with this as John does all but major work on the house, allowing the landlord to maintain a hassle-free income stream with minimal effort.  Because vacancies represent a cost to him (John), we came along at the right time, were able to rent quickly.

So for those who have handy house skills and enough money to rent a house, or are willing to play landlord and have an agreeable tenant, a person could live nearly rent-free. 
Terry Pratt – USA 

Housing Locations Affect a Home Mortgage

We are in the process of moving from Massachusetts to Rhode Island — why — because Massachusetts housing prices were too expensive.

We were able to find a wonderful home in RI for less than the cost of a two-bedroom condo in Mass., and this house has four bedrooms. So far this is the best money saving experience we have had and we look forward to continuing the trend with the tips we learn from your newsletter.M & J Corcoran – Soon to be from Rhode Island


Room Rental Helps Pay the Mortgage

I own a house in the San Francisco Bay Area where houses have always been very expensive. I made sure I bought a house with one more bedroom that I needed and rented out the master bedroom suite for the first several years I lived there. That allowed me to make the mortgage payment.

Room for rent sign on the side of a house.

Later, my salary increased and I was able to refinance the house so that it was not necessary to rent out the room any longer. This would not work for all families. Some would object to the invasion of privacy, but you don’t have much privacy when you have children. Others would worry about bringing a stranger into your home.

Screening is very important. Also, I charged each applicant a fee to have their credit checked. I had very strict rules stated in writing and signed by each occupant to make sure they understood my expectations. This turned out to be a totally positive experience for my family and I will own the house free and clear in just a few years. Barbara Stratton – Fremont, CA

If you are interested in renting a room for the short term, consider signing up to be a host with Airbnb, this is a great way to earn some extra income. Steve & Annette from MoneySmartFamily rent two of their vacant rooms and have earned an average of $1000 per month since 2014.


Tips for Paying Off a Mortgage Early

I’m very frugal and I’m hoping I can pay off my mortgage in about one year. How did you both do it? Do you have any tips and advice for me?

Answer: Thanks for sharing your update with us. You are really staying focused on eliminating debt. The last time you wrote was about 7 months ago and you owed $2500 on your credit card.

Paying off a mortgage is much the same as paying off a credit card. Control your spending with a budget system so that you have extra money each month to pay toward the loan principal (the money you borrowed).

As your income increases, take some of the increase and build your savings; another portion to pay on the house; and a little bit of the extra that you earn to enjoy. Do something fun just for you. It doesn’t have to be extravagant. But spending a little of your excess as a reward will help you stick with the hard work longer.

We wrote about this in our first book, America’s Cheapest Family Gets You Right on the Money – in the Savings Chapter section about windfalls. Having a plan BEFORE extra money comes in will help you eliminate debt faster.

Great Money Saving Idea

Quoting your Homeowners Insurance or Renters Insurance is a fast way to save money. We use GABI Insurance to get fast and easy comparison pricing.
Just connect your current policy with their quote tool and you’ll be on your way to saving money.



Cancel Your PMI (Private Mortgage Insurance)

If you have a conventional mortgage with Private Mortgage Insurance (PMI), you may be able to save a few bucks. PMI terms fall under regulations passed in the Home Owner Protection Act of 1998.

Under these rules, any private mortgage consummated after 1999, which was required to have PMI, may have the insurance canceled when the home owner’s equity reaches 20 percent of the original value of the property securing the loan.

You may have to make your request in writing, but by law, when your equity reaches 22 percent, the lender is required to notify you and cancel the policy.

So, do your math and if you fit the description write a letter and start saving.

Do Extra Mortgage Payments Really Help?

Mortgage document with two keys on a keyring.

Question: I’d like to know more about mortgage payments. If I pay one or two extra payments each year how much faster can I pay off my house? I have a 30-year mortgage.

Answer: Here’s an example of how extra payments can shorten your loan:
Mortgage amount: $200,000
Monthly payment: $1,199 ($1,000 interest, $199 principal)
Interest rate: 6 percent

If you pay an extra $1,199 payment (which is all principal) three months after you get the loan it will cut five months from your payoff date. If you pay one extra payment of $1,199 every year, you would shorten the loan by five years and six months. Paying extra earlier in the loan is the fastest way to shorten your loan because more of your payment goes to pay principal.

Use an online mortgage calculator to get exact figures — try Bankrate.com.

And beyond the numbers, it just plain feels good. It is a long process. But once started, you’ll become addicted to the thought of paying it off.

Make sure you get a loan history from your lender each year to confirm that they are applying the extra principal payment correctly. You can usually get this with a simple phone call. It is wonderful to see the principal plummet every year.

Use this mortgage calculator to see the difference between a 15 and 30-year loan.

NerdWallet’s 15 Year versus 30 Year Mortgage Calculator

<script src="https://embeds.nerdwallet.com/embed.js" data-id="457617" data-utm_campaign="mr_prod_457617"></script>

Taking Equity Out of Your Home

A brass scale with coins on one side and a house on the other.

Question: I am impressed that you paid off your mortgage in just nine years. Could you share how you did it? We have been in our home for 11 years, but due to refinancing and taking cash out of it, our balance is the same as when we moved in. I now see the error of my ways and want to reverse course.  Can you help?

Answer: Using your home an ATM is a dangerous habit. Paying off a home is not as difficult as you might think — it just takes a plan and discipline. But reducing the principal balance in your home should only come after you’ve eliminated your consumer debt — credit cards, car and student loans, most of which usually charge higher interest than a home loan. Deciding to live debt-free and to control our spending by using a budget were the first two steps we took to pay off our home.

We have always worked to keep our overhead low — if we wanted to buy anything from a car to a remodeled kitchen, we saved the cash before we spent, and never financed it. Financing raises your monthly overhead and costs you more in interest. Because we were debt-free except for our home, we started by paying $2 extra each month. As our income increased, so did the principal amount we paid on the house.

The Beauty of a Budget

By using a budget, we were able to control our other expenses and free up more money to pay off the house. We always asked our lender to provide us with an annual loan history to be sure they properly applied our extra principal payments.

This doesn’t mean that it was always easy. There are times when we would have loved to take a few hundred dollars and buy some new furniture, but we realized we could buy high quality used stuff for a fraction of the price and still reach our goal of paying off the house. As we watched the principal balance plummet, our enthusiasm and determination to pay it off soared.


Downsizing from our Dream Home

We bought our first home in 1993. It was 1800 square feet and we paid it off in just seven years. Not bad — I thought. Both my husband and I were working and once we got serious, all of my paychecks went to paying off the house. But over time, things changed. We had two babies 18 months apart and we began to feel cramped, and then our area was re-districted into a less than desirable school district. So after ten years in our home, three without a mortgage, we bought “the big house” including a corner lot, with a pool in the back. We even joined an inexpensive country club — only $90 each month. It sounds nicer than it was.


The house was a foreclosure, so we got a pretty good deal on it. But it needed work, lots of work. I know, I can hear you saying, “Stop, don’t do it!” Well, I wish we hadn’t, but we did. We bought into the “Big” lifestyle. We were in that house for almost two years when Bill and I decided we’d had enough. Within twenty-four hours we put the house up for sale and decided that we would move to Peachtree City, about 45 minutes west of where we lived.

The move just made sense. Peachtree City is in Bill’s sales territory, the schools are great, his golf club is nearby and it’s very family-oriented — most everyone goes to church!

Our friends were shocked by our decision. Our old house sold in six months, quite fast for that neighborhood! We got a good price, although we didn’t make much profit. But then again, I didn’t expect to.


RELATED ARTICLE: Home Hacks – Money Saving Tips Around Your Home

The Dream House Wasn’t Worth it!

We went from a home that cost $275,000 to one that cost $188,000, is much smaller and has almost no yard. Bill hates yard work. Unfortunately, we still have a bit of a mortgage but we are paying it down quickly. Because we asked the seller to pay extra points, we were able to get a lower interest rate. I am so happy, I can clean the entire house so quickly now. I know that buying big was stupid, but I also know that we’ll never do it again.

If ever I had a dream home that second house was it. But it just wasn’t worth it. We knew it was a mistake even before we bought it, but neither one of us had the guts to say, “Hey lets not do this.” We argued about money in that house, something we’d never done before. Now, the arguments are gone, I just tell Bill what I’m doing to save money and that I want to put the savings on the house. He just smiles.

I have NO regrets except that we didn’t do this in the first place! I’m okay that people think I’m odd — because to them, being debt free is ODD! On occasion, I do miss the kids’ huge loft and bonus room but I don’t miss cleaning and heating and vacuuming the entire house! Yes, I did feel “stupid” for being “stupid,” but I don’t dwell on it anymore, I’m too busy enjoying my new, freer lifestyle.  Elizabeth & Bill— Peachtree City, GA


Great Money Saving Idea

Quoting your Homeowners Insurance or Renters Insurance is a fast way to save money. We use GABI Insurance to get fast and easy comparison pricing.
Just connect your current policy with their quote tool and you’ll be on your way to saving money.




9 Keys to Smart Renting

Nine Keys to smart renting from radio host and consumer advocate Clark Howard.

  1. Before you pay an application fee to rent a house or apartment, clarify the monthly rent, length of the lease and the terms of the deposit.
  2. Be sure to confirm what utilities are and are not included in the lease: electricity, gas, water.
  3. Always take a day to review the lease document. Have a friend read over it also. Don’t be afraid to ask questions and indicate changes on the lease where you disagree with the terms.
  4. Add a clause to the lease that gives you the right to terminate the contract before its normal expiration if your circumstances change.
  5. Ask if the lease automatically renews at the end of the term.
  6. Make sure to be present for the move-in inspection, and note everything you can find wrong with the apartment. Be present for the move-out inspection, too.
  7. If a landlord doesn’t return your security deposit, you have the right to sue in small claims court.
  8. Renting from a private owner is fine, but be aware of the danger of not being able to renew your lease, or of the owner being foreclosed upon.
  9. If your landlord fails to respond to maintenance requests, send written requests. If a landlord doesn’t respond to a breakdown that makes the apartment unlivable, consider paying for the repair yourself and deducting the amount from your next month’s rent.

For more of Clark Howard’s money saving tips visit www.ClarkHoward.com


RELATED ARTICLE: Serving and Teaching Your Kids to Repair Things


Rental Tips and Mortgage Savings.


For more info regarding Housing, consider purchasing an autographed copy of our first book, America’s Cheapest Family Gets You Right on the Money. There is an entire chapter devoted to housing expenses.

Visit our Facebook Fan Pageto join our community of Frugal Folks all trying to stretch their dollars.


2 thoughts on “Housing – Rental Advice & Home Mortgage Savings

  1. Carla

    To prevent surprises, when you receive your renewal rate for your home insurance, compare it to last year. If there has been an increase in premium. Call your agent and ask them to review your policy. Is the dwelling coverage too much? Is the protection class correct? Can you request a re-evaluation of your credit score? Do they offer a loyalty re-write or credit? Lastly ask if they will shop your policy to see if there is a better rate. Once you have done this, you will know what your escrow will be paying for your premium and if it is higher than last year, your payments will increase and you can be prepared for it before you get the notice from the mortgage company.

    1. Steve Economides

      Carla, What great tips – and way to be proactive – rather than waiting for your mortgage company to send you a payment increase notice.

Leave a Reply