If one of your financial goals is to save more money in 2012,
you can’t go wrong by slashing your mortgage costs.

After all, if you’re a homeowner, your mortgage likely
represents your single-biggest expense, eating a large chunk of
your paycheck every month.

Fortunately, there are several ways to cut your mortgage costs
and put more cash back into your bank account.

Try these three strategies to lower your mortgage expenses in
2012:

1. Shop around to refinance your home loan

If you have a mortgage and are paying more than 5 percent on
your home loan, consider refinancing. A mortgage
refinance

could save you thousands of dollars a year, especially if you have
decent credit.

A 2011 survey from CreditSesame.com found that there were 12
million credit-worthy Americans who were overpaying their mortgages
by an average of $436 a month. By refinancing, those homeowners
could save about $52,000 over 10 years.

Unfortunately, too many people have been reluctant to even try
to refinance, for fear of getting rejected by a bank. Even those
who do take the time to apply for a refinance often simply go to
their existing mortgage lender–failing to shop around.

But that’s a big mistake. A
recent study

in the Journal of Real Estate Finance and Economics found that
women are especially guilty of not comparison shopping for the best
mortgage rates. As a result, women tend to pay higher mortgage
rates because “they are more likely to choose lenders by
recommendation while men tend to search for the lowest rate,” the
study’s authors said.

Don’t make the common refinancing mistake of failing to shop
around, automatically going with your current lender. Today you can
easily compare current mortgage rates and get quotes from several
mortgage lenders through sites like
HSH.com

and
MoneyRates.com

.

HSH.com’s refinance calculator can show you exactly how much
money you could save with a refinance.

2. Check your credit reports

Before you apply for a refinance, be sure to check your credit
reports. By law, every 12 months you can get one free copy of each
of your credit reports from Experian, Equifax and TransUnion. Those
free credit reports are available online at
AnnualCreditReport.com.

Reviewing your credit reports is critical because you don’t want
any mistakes to cause you to pay a higher rate than necessary for
your mortgage. And unfortunately, errors in credit reports are all
too common. One study from Consumer Reports found that 70 percent
of all consumer credit reports contain mistakes.

So check your credit rating and take action to immediately
dispute any erroneous information. Under the Fair Credit Reporting
Act, if you dispute something in your credit report that is
outdated, inaccurate or unverifiable, then that information must be
removed within 30 days.

3. Do basic home maintenance and minor upgrades

During the housing boom, when lending standards were far more
lax, it wasn’t uncommon for mortgage lenders to do “drive by”
appraisals of homes, or to simply grant home loans based on online
appraisals of properties.

Those days are long gone. Before approving a mortgage nowadays,
a lender will surely send out an in-person appraiser to do a
detailed inspection of your home.

To get the most favorable valuation of your residence, there’s
no need to do a major home addition or pay for expensive
renovations. Instead, focus on three low-cost solutions: cleaning,
basic home maintenance and minor upgrades.

Create a great first impression by cutting your front grass,
de-cluttering all rooms and thoroughly cleaning your home. If your
last paint job was done back in the 1990s, a fresh coat of paint
(in a neutral color) wouldn’t hurt either.

Also, attend to things like leaky faucets or problem toilets.
Consider changing bathroom rugs and shower curtains for a fresher
appearance. If your kitchen is older, try installing new handles
and doorknobs on cabinets and doors to create a more updated
look.

All of these quick fixes can help your home achieve a higher
appraised valuation.

A higher property value aids your mortgage refinancing efforts
in several ways. For starters, lenders will use your property
appraisal to calculate your loan-to-value (LTV) ratio.
Additionally, if your loan amount is 80 percent or lower than your
current property value, you won’t have to pay Private Mortgage
Insurance.

But even without an 80 percent LTV ratio, realize that mortgage
lenders have other options, such as 90 percent LTV loans, which
carry favorable interest rates and can also save you money on your
current mortgage rate.