For most homeowners, their mortgage loan payment is the largest bill they’ll have coming in every month. Because traditional mortgage loans will also usually mean 30 years of monthly mortgage loan payments, it can be difficult to anticipate how life will change. What may have once been affordable may no longer be the case—for example, perhaps you’ve had to pay medical bills due to a sudden illness, or maybe someone in your household lost their job. Maybe nothing has changed, but you are just feeling overwhelmed by that large monthly mortgage loan payment. Whatever the case may be, it’s important to keep up with those mortgage loan payments, because falling behind can put your home at risk. If you are looking for ways to lower your mortgage loan payments so that they’re more affordable, try the following:
If nationwide interest rates have dropped and you have great credit, you might qualify for a better rate. Bear in mind that refinancing your mortgage loan will also mean paying for closing costs again, so you’ll need to consider the pros and cons of refinancing your mortgage loan and see just how much money you’d be saving. Refinancing a mortgage loan is a very individual situation; some borrowers might end up paying more by refinancing so it’s not worth it, and others might break even—also not worth it. But in some scenarios, borrowers can save thousands this way and a lower interest rate will also lower the mortgage loan payments, so it’s certainly an option worth looking into.
If your down payment was less than 20 percent of the home’s sale price, and you still haven’t reached 20 percent equity yet, your monthly mortgage loan payments will likely include PMI (Private Mortgage Insurance). The average borrower will pay around $130 per month in PMI, but this can vary depending on your down payment amount, home sale price, and other various terms of your specific mortgage loan. Get rid of this monthly cost completely by eliminating your PMI sooner. There are a few different ways to eliminate PMI, but the surefire way is to get your home loan balance under 80 percent of your home’s appraised value. This might mean making larger payments towards your principal, which might not be financially feasible. But if it is, this can mean reaching that number faster, getting rid of PMI sooner, and lowering those monthly payments.
If you’re experiencing a true financial hardship, you may qualify for loan modification, which can change some of the conditions of your mortgage loan (term, interest rate, and so on) in order to lower your monthly mortgage loan payments and make them more affordable. Ask your lender for more details to see if you’d qualify for any type of loan modification through them. You may also be able to receive government assistance through the Home Affordable Modification Program (HAMP), which can help to lower your monthly mortgage loan payments.
Do you need extra cash to catch up on monthly expenses? Peachtree may be able to help if you’re receiving long-term structured settlement payments. Contact Peachtree Financial Solutions today to learn more about selling some or all of your future structured settlement payments for a lump sum of cash.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.