Seven Ways To Lower Your Mortgage Payments
If you trusted the living expense calculators and you figured that your rent or lodgings should be around 50% of your income, you might not be too pleased with your current mortgage payment. After all, everyone’s always looking to pay less for the necessities of life, like the roof over your head. While many are always looking for a way to divert cash flow from necessities into savings, it’s become a much more dire issue in the last year. While the COVID-19 pandemic continues to ravage the world economy and leave question marks where there used to be assurances, people are struggling to pay for the basics.
Stategies For Lowering Your Payments
Here at Lending Studios, we believe that the joy of home ownership is a hallmark of the freedom Americans cherish. That’s why we intend to help you find ways to save as much as possible without losing your home during this tough economic period. With a can-do attitude and a little ingenuity, we might be able to find a solution to your monthly expense problems and help you get your mortgage payment as a reasonable monthly payment (at least for some time) so that you can keep food on the table and continue to live your life as comfortably as possible.
We’ve gathered as many strategies to help bring your mortgage payment to a more manageable level or to help free-up needed cash using your home equity. Read on to find out what your options are.
Main Options For Bringing Down Mortgage Costs:
Lose the PMI
Redo Tax Assessments
Refinance Your Mortgage For Lower Interest
Refinance Your Mortgage For Longer Terms
Extend Repayment Terms
Rent a Room
Loan Modification Programs
Need More Time?
No More PMI
When you buy a house with less than 20% down on the purchase price, most lenders will require you to pay mortgage (PMI) insurance.. This is an additional charge to your recurring mortgage payment and is added to your monthly mortgage bill. Over the course of paying off your home, mortgage insurance can add thousands of dollars more to the overall cost of your loan. So, in the end, when your home has risen in value, you’ll still be losing money on the real estate investment because you’ll have paid so much more than the cost of the home in interest and insurance payments.
However, you can get rid of your PMI after purchasing your house. You’ll have to ensure that you have at least 20% equity into your home and then you can make a request of your lender to drop your PMI. It may require an appraisal, but if the PMI can be removed, you stand to save a lot of money.
Redo Tax Assessments
If you have a home loan that has an escrow, your property taxes are likely a very large part of your mortgage payment every month. Like everyone else, your property taxes are based on the county’s tax assessment of your home. An assessor will analyze neighborhoods and the houses in them based on past sale prices, land sizes, and other data to estimate your property tax based on how much they think the house is worth. For example, if your home is in an urban area or an area that’s growing rapidly, your tax assessment could be a little high. As a homeowner, you can protest the assessment and request to have the county re-evaluate your neighborhood.. This will decrease your monthly mortgage payment if your protest is approved.
Refinance Your Mortgage For Lower Interest
Mortgage rates are currently at an all-time low. If you’re looking for a way to significantly undercut the monthly mortgage payment and the long-term amount that you pay for your house. Now is the time to refinance at a lower interest rate. If you can decrease your interest rate by just 1%, refinancing would be very worthwhile to you.
Not Sure About Refinancing?
Refinance Your Mortgage For Longer Terms
Increasing the amount of time you have to pay off your loan will lower your monthly payment. You can extend your loan period in order to lower the monthly amount due and make it a more manageable payment. If you’re in a tight financial spot and you’re worried about continually making payments, this might be the best approach in order to ensure that you can keep your home. You might even be able to get a refinance agreement that allows you to make higher payments toward the principal once you get back on your feet financially so that you can continue to pay off the mortgage in a more timely manner.
Extend Repayment Terms
You can recast or re-amortize a mortgage and allow yourself to extend your repayment term and lower the total amount you have to pay. You wouldn’t necessarily need to refinance your mortgage to accomplish this goal. Many lenders offer this service for a fairly low fee, however you should know that you’ll end up paying more on interest in the long run. For example, if you stretch your current 15-year mortgage out to a 30-year mortgage, your monthly mortgage payment will go down, but the overall sum that you pay toward the house will increase. However, if you’re in need of an immediate solution for your cash flow and refinancing for a better interest rate and term length isn’t in the cards, this could be your best bet.
Rent a Room
If you’re looking for a way to scrape together a little extra cash month-to-month, you could consider renting out one of your rooms. If you have a finished basement or even just an extra, unused bedroom, you could get serious help knocking down your mortgage payment every month. Plus, you’ll get help paying for utilities and, depending on the deal you strike with your new roomie, you may even be able to split grocery bills to make your living expenses more affordable as a whole.
Need Cold Hard Cash Instead?
Rent a Room
If you’re looking for a way to scrape together a little extra cash month-to-month, you could consider renting out one of your rooms. If you have a finished basement or even just an extra, unused bedroom, you could get serious help knocking down your mortgage payment every month. Plus, you’ll get help paying for utilities and, depending on the deal you strike with your new roomie, you may even be able to split grocery bills to make your living expenses more affordable as a whole.
Loan Modification Programs
If you’ve tried everything else on the list and you’re not a candidate for them or simply can’t manage it for some reason, then you could turn to federal loan modification. There are a few loan modification programs offered by the federal government that might be available through your lender. You’ll need to meet certain eligibility requirements and the program might provide short- or long-term relief depending on what you qualify for.
Reach out to Lending Solutions to Start Refinancing
If you’re considering potentially refinancing in order to make your monthly mortgage payment a more manageable expense, reach out to us. We’re here to provide support throughout the process. If you’re ready to get started, we’re ready to help. Reach out to us today to start an initial consultation regarding your future refinancing options.
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