Make the move to reduce your mortgage

SAN FRANCISCO (9/1/10)--So you've given up your daily caf� coffee, your weekly dinner date, and your monthly massage to save money. But, if you're looking to save big money, look no further than your mortgage. That loan most likely is your biggest monthly expense--while interest rates remain at record lows (MarketWatch.com, Aug. 25).

Here are ways to reduce your home loan expense:

Refinance--Refinancing at a lower rate can cut your monthly payment by hundreds of dollars. And if you can afford to refinance to a shorter term, you could save thousands of dollars in interest over the life of the loan.

Automate it--Many financial institutions offer an even lower rate if you set up automatic mortgage payments. It's an easy step and one less check to worry about writing each month, or one less bill to pay through automatic bill pay.

Ask about fees--It doesn't hurt to ask the loan officers at your financial institution if lower fees are available on some mortgage costs. If you have good credit, the lender may even waive a few charges.

Take out the loan in one spouse's name--If either you or your spouse has a tarnished credit score, or if one of you is self-employed with not much income, consider taking the loan out only in the name of the person with the higher credit score. You still can have both names on the title, but only one name on the loan.

Also, check what you're paying in private mortgage insurance (PMI). PMI is insurance that lenders require from most home buyers who obtain loans for more than 80% of their new home's value. The Homeowner's Protection Act of 1988 requires mortgage lenders or servicers to automatically cancel PMI coverage on most loans once you pay down the mortgage to 78% of the value and are current on your loan.

Talk to a loan officer at your credit union for help with these decisions. And, to run the numbers on refinancing, use the "Calculator: What Will My Monthly Mortgage Payment Be?" in Home & Family Finance Resource Center.