4 Ways To Lower Your Mortgage Payments

If you are paying a mortgage or business loan like those offered by Lendified, you may be wondering whether there are ways you can lower your payments. A lower payment will give you some breathing room in terms of the budget, allowing you to focus on other financial goals. The good news is that you have several options to consider, and you can choose the option you find the most convenient for you. Here are several ways you can lower your mortgage payments.

Make a Bigger Down payment

When you are considering buying a home, you will have to save for a down payment before getting a loan from a bank. Most financial advisors recommend putting down at least 20%. But if you are not in a hurry to buy a home, try and set aside more than 20%. The more you put on the down payment, the lower you will pay your mortgage.

Extend Your Repayment Term

Another way to lower your mortgage payment is by extending your term, which is also called re-amortizing or re-casting. To do this, you do not have to refinance your mortgage because most lenders will offer this service at a small fee. You can extend a 15-year mortgage to a 30-year mortgage, which lowers the payments, because you now have more time to repay the loan. While this may lead to you paying more interest, it is ideal for a borrower who needs an immediate solution to cash flow issues. For instance, maybe your child has just attended school, and you will be paying tuition fees. If you feel that the amount you are currently paying is going to strain you financially, this is a great idea to consider. John Antle also recommends talking to a mortgage consultant before making such a decision. Getting expert advice can help you see whether this is a good idea.

Refinance Your Mortgage

Most people often confuse refinancing their mortgage and taking out a second mortgage. According to Tribecca, a second mortgage is where you borrow money against the equity of your home. On the other hand, refinancing your mortgage means taking out another loan to pay the first loan. If you have a good credit score, you can save up some money by refinancing your current mortgage. If you choose this option, ensure you find a lender with low fees.

Eliminate Private Mortgage Insurance (PMI)

If your down payment was less than 20% when you were buying the house, there is a high chance you are paying private mortgage insurance aside from the monthly mortgage payment. Unfortunately, this will cause the overall cost of your home loan to go up. You can get rid of the PMI. Start by repaying enough mortgage to at least have 20% equity on your home, then request the lender to drop the PMI. The lender will inform you of how the process works, and if you are successful, you will have managed to reduce your mortgage payments.

These are just a few of the ways you can lower your mortgage payments. Find a method that applies to you and make good use of it.

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