How to Lower Monthly Payments on a Mortgage

Monthly payments on a mortgage can be lowered in most people's cases with just a few steps. These steps may take significant time and effort, but if you need to lower monthly payments on your mortgage they will be worth the time.

Difficulty: Moderate

Instructions

1. Appeal the value of your home.
   
   Many people think first of a refinancing mortgage in order to lower monthly payments. This article will cover a refinancing mortgage below, but the first step is to deal with the government. Often the county appraiser will have appraised your property at a value much higher than your purchase price. Take documentation of your purchase price to your county office and fill in the papers necessary to reduce your property taxes.

2. Apply for tax exemptions.
   
   Many states have property tax exemptions for home owners who live in their home and for home owners who have mortgages. Check with your county auditor to see what is necessary for you to do before getting a refinancing mortgage. Often these two steps can save you several hundred dollars a month.

3. Change your home insurance set up.
   
   Though this may cost you in the long run, it is worth considering before trying to refinance a mortgage to lower monthly mortgage payments. You can raise you deductible, reduce some elements of your coverage, and eliminate any overlap in coverage between home and medical insurance.

4. Use a refinancing mortgage to extend the terms.
   
   Talk with your current lender about the possibility of a refinancing mortgage to lengthen your mortgage from 30 to 40 to even 50 years. Though generally speaking this will end up costing your more money over time, it is a better option than facing foreclosure or bankruptcy.

5. 

   Use a refinancing mortgage to lower mortgage interest.
   
   If your credit is good, your equity is high, and you have steady income then check the current interest rates. The general when to refinance rule of thumb is when your interest rates will drop two percentage points from their current point.
   
   * See more tips on lower monthly mortgage payments below.

Tips & Warnings

• While looking at a refinancing mortgage be sure to check on up front closing costs.
• Avoid adding on variable interest rate mortgages as these can lead to eventual foreclosure.
• Speak with a financial advisor as well as a mortgage broker to be sure you are getting sound advice.
• See related articles and resources on this page for more help.

Resources

• When to Refinance Rule of Thumb
• How to Know When to Refinance

[nancycarol]

on 11/13/2009 Great tips on How to Lower Monthly Payments on a Mortgage. This should help lots of people. *5