4 Steps to Lowering Your Mortgage Rate
Monday, March 17, 2014, 1:00 AM | Leave Comment
If you are like many people in the area, you might be struggling to pay your mortgage. This certainly isn’t uncommon, and many homeowners will face this problem at some point in their lives. Fortunately, there are some things that you can do in order to lower your payment.
In fact, here are four steps to take to lower your monthly mortgage costs, and gain control of the situation:
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Contact Your Lender and Refinance
No matter what you do, if you are struggling to pay your mortgage, it is imperative that you contact your lender. They will be able to work with you in almost all cases, including the possibility of a refinance.
Refinancing can be an option for you if your loan is newer, say within the past 10 years, and if the new interest rate will be at least 0.5% lower than the current rate.
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Lose Your PMI
You might be paying private mortgage insurance, also known as PMI. If you are, you are probably paying hundreds, many times thousands, of extra dollars each year.
The good news, however, is that you can drop this insurance and save all of that money. According to Sacramento mortgage, you will need to have at least 20% equity in your property before you do this, and you might need to have your home appraised.
Keep in mind, the lender will not automatically take your PMI away; this is something that you will need to request.
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Extend Your Loan
Another step that you can take when it comes to lowering your mortgage rate is to extend the loan. For instance, you might be paying a 15 or 20 year mortgage and the payments are too much for you.
You have the option of extending that mortgage to a 30 year mortgage and pay lower payments. The one caveat of doing this, however, is that your interest rate will rise in most cases. If this happens, however, most people will still see lower payments.
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Fight the Tax Assessment
Finally, you can take the step to fight the tax assessment that is attached to your mortgage. In general, each monthly payment that you make to a lender is made of three different parts: the principal payment, the interest payment, and the impounds, which is the money that goes towards paying insurance and taxes.
Many times, homeowners will find that they are paying too much in taxes, and that they can get this payment lowered by challenging it. In order to do this, you will need to contact the county for a hearing.
Your taxes will be assessed at that point, and if found lower than originally thought that amount will be deducted from your payment.
These are just a few ways that you can lower your mortgage. For more information, contact a reputable mortgage company in the area.
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