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Ways to Lower your Mortgage Payments

Posted on in Mortgage

Many people worry about their mortgage every month. There is a palpable dread when they open their mailboxes to find their monthly bill. If you feel the same way about your payments, then follow these steps to lower your payments and alleviate your stress.

The first step is to refinance your mortgage to get a better interest rate on the money you borrowed. This might not be available to you if your home's value is underwater. The only option is to try to refinance through the Home Affordable Refinance Program or HARP. This is only available under certain conditions, like your mortgage is from before 2009 and is owned by Freddie Mac or Fannie Mae. By financing at a lower rate, you can save money on your monthly mortgage payment.

The second option is to review and reduce your monthly tax payment. Taxes are escrowed over the course of the year and paid monthly with your principal and interest. The taxes are based on your county's estimate of your home's value. If your home has not been assessed since the housing bubble burst then you might be paying too much for your taxes based on that inflated value. Start by calling your country's assessor and explain the need for a new assessment of your home's value. If you can lower the taxes of your home, then you can lower your monthly payment.

Another step can be buying a homeowner's insurance policy with a higher deductible. These payments for your insurance policy occur monthly and are often included in your mortgage payment. The benefit of a higher deductible is that it doesn't cost as much as a lower deductible policy.

The last step you can try is setting up automatic payments from your checking account. A couple of banks will give you a small discount for this service. That is savings that can really help in the long run and you will not have to stress about mailing your payment every month. There are times that these four steps cannot help you make your mortgage payment and you could be facing a foreclosure. If you are behind on your payments, then do not try to lower your payments. Contact a knowledgeable foreclosure defense attorney in Libertyville before you lose your house.

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