Mortgage payments are often a source of financial stress for many homeowners. Most mortgages are larger than the rest of the family’s bills combined, and if you can’t pay, you stand to lose your home. Luckily, there are some relatively easy ways to reduce mortgage payments so you can stress less, while keeping a safe roof over your family’s head.
Switch to a biweekly payment plan
Instead of paying your mortgage once a month, pay half of your monthly payment every other week. For example, if your mortgage is $2,600 a month, pay $1,300 every other week. You can put each half-payment in a savings account, then pay the mortgage directly from that account once a month. By doing this, you make 13 payments in a 12 month period, which means you pay down your principal faster. Alternatively, you can send in one double payment per year to get the same effect.
Petition to get rid of your PMI
If you paid 20 percent of your mortgage as a down payment, you don’t have to pay for private mortgage insurance (PMI), so this tip won’t apply to you. If you weren’t able to put enough down when you first purchased your home, you may be able to save money by getting rid of your PMI. If your mortgage value is less than 80 percent of your home’s total value, you’re eligible to eliminate PMI. This move could save you about $130 per month, which you can use on other more critical bills.
Modify your loan
If you’re going through a severe financial hardship, you might qualify for loan modification. This is a special program that allows homeowners to reduce mortgage payments during difficult financial times so that homeowners don’t lose their homes. If you think that this might be a solution for you, be sure to research this option before you get behind on your payments.
Ask for a new tax assessment
Property taxes are based on tax assessments. If your home’s value has decreased, the assessor may not have realized it. You can petition your local tax authority for a reassessment. If your home has gone down in value, you’ll be able to pay less in taxes, which can save you money on your mortgage costs.
If your mortgage payments are killing you, don’t stress. There are lots of ways to reduce your mortgage payments so that you won’t lose your home–or your sanity.
Refinance into a new loan
In many cases, you can refinance your mortgage to obtain a better rate or lower monthly payments. Refinancing is a process in which your lender pays off the original loan and replaces it with a new loan. In some cases, you refinance by borrowing against your home equity line of credit; in others, your lender is willing to refinance even if you don’t have much equity in the home yet. You may need to pay a small fee to refinance, but it can be worth it if it reduces your monthly payments. Click here to compare free refinancing quotes.