Do you really think that your mortgage bills feels like it’s already crushing you down to the bones. Is there any possible way to lower the monthly payment? Well, if you need help, here are the four best ways for you to lower your mortgage payment:
Start Refinancing
Do you have to refinance? Well, the answer actually depends on two factors. The first one is the age of your loan and the other is the difference between your current as well as potential new rate of interest. Keep in mind that home loans amortize. It only means that you mostly pay interest towards the beginning of the loan term and the principal towards the end of the term. The rate of interest will not hurt you until the end of the term, whenever your payments are largely principal. As a result, the rate of interest is most important towards the start of a term. This simply makes a less of an impact towards the end of the term, when your payments are principal.
Time to Drop Your PMI
Do you pay your Private Mortgage Insurance? In case you bought your home with a down payment less than 20%, you could be paying your PMI, which is merely about adding more to your annual mortgage. The good news is that, you will not be stuck paying your PMI forever.
First, you should repay enough of the mortgage that you’ve gained 20% equity in the house. You should also contact your lender to inquire about the process of dropping down your PMI. The lenders will not drop it automatically, though, as you need to request it. Many lenders will send an appraiser to determine the value of the home before the lender verifies that you own the 20% equity stake.
Get Longer Loans
Suffering under hefty monthly payments coming with 15 to 20-year mortgages. Extending your mortgage into a conventional 30-year term to cut down your monthly payment can help. The bad side is that, your rate of interest will rise. However, what makes this work is that, you could choose to make additional payments on the mortgage, as if you’re paying a 20-year loan. These extra payments will actually help you satisfy your loan faster than ever, without even obligating you to make big payments if there’s an emergency leaving you cash-shy of a month or two.
Take Tax Assessment as a Challenge
If there’s a strange way on how to lower your mortgage payment, it would be this one. A usual mortgage payment consists the interest, impounds and your principal payment. In case you default on your property tax bill, the county will surely put a lien on your house and will take priority over the lender’s lien. This will then result to the lender collecting your property taxes every month just to protect its interest in your house. Such payment sits in escrow until the annual property tax bill is due.
If you would like to lower your mortgage fast and easy, it would be best for you to take the tips mentioned above.