How to Decrease a Monthly Mortgage
Altering the terms of your home mortgage and lowering the payment can have a positive impact on your personal finances. Lenders determine how much you can afford to spend on a home based on your income when you complete the application. If your situation changes, and your income drops, affording your home loan payment can prove challenging. Fortunately, ways to decrease your mortgage payment and ease financial problems are available.
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Instructions
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Mortgage Refinance
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Fix your credit. Raise your FICO score with good credit habits, such as timely payments. Reduce your credit card balances to help build a better score, which helps you qualify for a low-rate mortgage refinance.
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Save money for mortgage expenses. Be prepared to pay closing costs with a mortgage refinance. These costs are about 6 percent of your new mortgage loan balance. Ask your lender to wrap the cost into the mortgage loan if you're unable to afford this expense.
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Learn your options. Research mortgage loan options before applying for a refinance. For example, a low fixed-rate mortgage offers long-term predictable payments, and are less risky than adjustable rate mortgages. You may opt for a 40-year mortgage term to further reduce your payment.
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Compare loan rates. Your mortgage rate determines your monthly payments. Talk with several lenders and ask for a no-obligation quote in which they'll evaluate your credit and finances to determine a rate.
Mortgage Modification
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Keep records of your income. A drop in income might qualify you for a mortgage modification, where lenders lower your mortgage payment without a refinance. You'll have to provide proof of financial difficulty, such as bank statements and copies of unemployment compensation.
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Review your household finances. Evaluate your monthly expenses to determine how much you can afford to spend on a home loan each month.
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Call your lender. If you're unable to afford your current payments, contact your lender immediately to make arrangements and discuss your options. Inquire about loan modifications and learn the requirements. Mention how much you can afford to pay to see if they'll reduce your payment to this amount.
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