Do you want to reduce the amount you pay for your mortgage each month without making the term of your loan longer? This is the procedure to follow:
Cancel your private mortgage insurance and save yourself some money.
If you didn’t put down at least 20 percent of the purchase price of your house, you undoubtedly had to pay for private mortgage insurance. The premiums for this very inexpensive add-on may easily run you more than 100 dollars each and every month. (You may expect to pay something in the neighborhood of $83 per month for every $100,000 that you borrow.) You will be able to receive the reduced monthly payment that you’re looking, in addition to saving many thousands of dollars over the duration of your loan, if you are successful in getting your lender to eliminate the coverage, which, fortunately, may be done in a number of different ways.
Reduce the amount of property tax you pay
There is no need that the annual property tax assessment that you are given have to be converted into your property tax payment. If you make use of these six tactics to get a better deal, you will be well on your way to having a more affordable monthly mortgage payment.
Find Ways to Lower the Premium on Your Homeowner’s Insurance
Have a conversation with your insurance agent to find out whether or not you have overlooked any opportunities to lessen the rates you pay for your homeowner’s insurance. The following are some discounts that you should inquire about. Simply increasing your deductible to $1,000 is typically sufficient to decrease your premiums by enough to qualify for a 40 percent discount; thus, this might substantially assist you in bringing down your monthly mortgage payment.
Consider Getting a New Mortgage
Since you purchased your home, have you seen a significant decline in the interest rates? If this is your situation, refinancing might be the key to lowering your monthly mortgage payment. Simply make sure that the duration of your mortgage remains the same as it is at the present time so that it does not take you any longer to pay off your home.
Apply for mortgage forbearance
If you experience a short-term financial setback and worry you’ll be unable to afford your monthly mortgage payment, a forbearance agreement may provide temporary relief.
During mortgage forbearance, your lender may agree to suspend or lower your mortgage payments for a specific period of time. At the end of the forbearance period, payments resume as normal, and you may have to make up the missed amount in some way.
If you’re interested in forbearance, it’s important to contact your lender before missing a payment, not after.
Apply for loan modification
If you’ve experienced a severe financial hardship and your mortgage payment is no longer affordable, a loan modification may be an option. That’s when a lender restructures your loan in some way to lower the monthly payment.
You don’t have to be behind on mortgage payments to request a loan modification from your lender. In fact, if you’re facing an imminent reduction in income — for example, from the loss of a job or retirement — it’s a good idea to reach out to your lender about potential loan modification in advance.
Have you considered opening an escrow account?
If your homeowner’s insurance, property taxes, and private mortgage insurance are all paid out of an escrow account, lowering any of these fees will not immediately result in a decrease in your monthly mortgage payment. You will be required to hold off until the end of the year so that your escrow account may be modified. When this occurs, you will be entitled to a refund in the amount that corresponds to the amount that you overpaid.