How to Lower Mortgage Payments
Now is a great time to buy a home, it is what the real estate arena calls a buyers market. If you already own a home, it is a great time to rethink about that current mortgage. Buying a home with a new mortgage or rethinking your current mortgage is a huge investment and it is a decision that needs to be well thought out with lots of planning, a large part of the planning is figuring out the best ways to lower mortgage payments.
Am I expert at this? Definitely not, but I have been looking at our home mortgage loan and have been making tons of phone calls to see if there is a way to lower mortgage payments on our current home. It is incredible how much valuable information can be gained about mortgage loans from talking to a variety of people that work in the real estate and mortgage loan field.
I have been given a lot of different advice on how to lower mortgage payments but there has been two ways that have been consistently mentioned by the mortgage loan representatives that I have been talking to.
One of the ways mentioned to lower mortgage payments is by staying away or getting rid of Private Mortgage Insurance (PMI). If you put down less than the 20% most lenders will require you to get PMI which can substantially increase your monthly mortgage payment. The obvious way to avoid PMI is having a down payment that is more than 20%, however this is easier said than done for most people. A possible alternative to avoiding PMI is what is called a Piggyback mortgage, it is essentially a first loan with a second loan both closing at the same time. Most often, the first loan will be for 80%, the second loan will be for 10% and the buyer comes up with the remaining 10% as a down payment. However, if you do not have 10% as a down payment, some lenders will even allow the second loan to be for 15% or even 20%. Keep in mind, that those lenders are not as easy to find and not everyone will qualify for those terms; however, I feel that attempting to lower mortgage payments is worth the effort.
Another way to lower mortgage payments is by stretching out the loan, this is something that I just learned about from my daily phone calls researching home loans. Some lenders will go longer than the standard 30 year loan, there are 40 year loans and even 50 year loans. The interest will obviously increase and the debt would last longer but the positive is this method would lower mortgage payments.
The best advice I can give from my experience to lower mortgage payments is to do the same as I did and make lots of phone calls and learn what loans are out there and what terms are available. Also, make sure to talk to a reputable banker, loan officer or financial consultant, there is most likely some type of loan available that will lower your mortgage payments. It is a matter of investing the time and making informed decisions!
