With utilities, car payments, groceries, insurance, retirement savings, you may think that there is barely enough money left at the end of the month! But by lowering your monthly mortgage payment, you can take control of your finances and ease any financial strain. How can you do this? Check out some common strategies below:
- Extend your repayment term: An easy way to lower your monthly mortgage payment is to extend your mortgage term. For example, if you move from a 15 year term to a 30 year term, your monthly mortgage payment will decrease, giving you more time to repay your loan while getting a greater cash flow for whatever you want! Even better, you may not even need to refinance; ask your mortgage lender, such as Shamrock Financial, about this service.
- Refinance: By refinancing, you could get a lower interest rate and extend your term, which will result with a lower monthly mortgage payment. Make sure your credit is good and remember that you will pay the typical costs of getting a mortgage to refinance.
- Bye bye PMI: If you put down less than 20% when you purchased your home, you are likely paying mortgage insurance on top of your monthly mortgage payment. And who needs that? But once you gain at least 20% of equity on your home, you can ask your mortgage lender to end your PMI. Your house may need to be appraised, but once you get rid of that pesky PMI, you will notice a drop in each monthly mortgage payment.
- Change to a fixed term mortgage: Adjustable rate mortgages are a great way to get a low interest rate, but what do you do when that amazing introductory period is over? You change to a fixed rate mortgage. You may still get a lower interest rate, but one that is fixed for a set amount of time. Lower monthly mortgage payment, easier budgeting.
- Take cash out to access equity: If you are refinancing, you can choose to take cash out of your equity, in addition to the actual refinancing. If you get a lower interest rate or extend your term, then you will notice a drop in your monthly mortgage payment. But the beauty of getting that cash is this: if you use that cash to pay down higher interest rate debt or invest for profit, then you will end up with more money in your pocket which you can use towards your mortgage. Don’t forget you will need to pay back that cash you take out so do your calculations.
If you want advice about getting a mortgage, refinancing, or lowering your payments, come in and talk with us here at Shamrock Financial. We will take the time to understand your unique situation, and together, create a plan that meets your immediate needs. The time is now!