This is a continuation of “Ways to Get a Lower Monthly Payment.” This second, and final, installation will examine different ways that an individual is able to pay less on their mortgage every month, so that they have a certain amount of flexibility in times of financial pressure. If these tips are useful to you, please check our blog to read the first part of this series and learn more about ways to lower your mortgage payment.
Pay more when you can
If you are looking to lower your mortgage payment over the long-term, and don’t necessarily need a short-term solution to lessen financial pressure, then you should opt to pay more than is required on your mortgage. This is usually the best solution to getting a lower monthly payment, if you can manage it. When you pay more towards your mortgage, you lower the principal that must be paid over the course of your mortgage timeline. This means your payment can be divided up into smaller parts. On top of that, it also lowers the interest that is gained on your principal, which saves you money in the long run.
Refinance your mortgage
If you have been in your current mortgage for a while, then you may qualify to refinance your mortgage to set up a new payment plan. The nice thing about refinancing is that you usually get a lower interest rate, since lending to you is no longer as high risk, since you already own the home as collateral. Lowering your interest rate through refinancing will mean you are paying less per month, but will also save you more money after you have paid the principal, since less interest will have compounded. However, this option usually requires certain fees from the bank and an attorney, so it is more of an investment.
Get a Federal Loan Modification
For families who are having difficulties paying their mortgage, there is a way that the government is able to reduce some of the pressure that your monthly payment puts on your bank account. Depending on your income and other requirements, you may qualify for a Federal Loan Modification, which gives you higher leveraging power to renegotiate your interest rate with the bank, since the Federal government is backing you.