Monthly Payments on Mortages

The current economic climate has affected millions of people. Investments have been lost and unemployment remains high. If you are having difficulty paying your mortgage, there are several ways you can lower your monthly payments on mortgages.

Refinancing your mortgage can result in reduced payments. Your current mortgage may include an interest rate that is considerably higher than those available today. If your financial situation and credit record have not deteriorated since the time you acquired your present mortgage, you should be able to qualify for a refinance. Next, consider lengthening the term of your mortgage. For example, if you have a 15-year fixed-rate mortgage, think about switching to a 30-year fixed-rate loan. Your payments will be significantly lower, as long as you are comfortable with a longer payback. This option is especially viable if you plan to own your property for a long time.

Private Mortgage Insurance (PMI) can occupy a large portion of your monthly payment on mortgage. If you purchased your home with a down payment of less than 20 percent, you are very likely paying PMI. If the value of your home has increased, and you have paid sufficient principal, ask your lender if you may be allowed to drop this expensive insurance. Homeowner insurance is also a significant part of a monthly budget. If you are unhappy with your current rates, shop for a new insurance provider.

Finally, do something about your property taxes. While it may be difficult to reduce them retroactively, you can file an appeal with your county assessor’s office. You may have to pay for a home appraisal and other fees, but if you are successful, lower property taxes will offset this cost. If you are paying your property taxes every month with an escrow account, consider a refinance that will allow you to discontinue this practice. You will still have to pay your property taxes each year or semi-annually. However, you may earn a bit more by setting aside your monthly tax payment in an interest-bearing account until payments are due.