The most desirable method of lowering your monthly mortgage payment is to refinance with a lower mortgage rate. If your financial situation has improved since you purchased your home you may qualify for a lower interest rate. This improvement could be due to paying down your bills, getting a higher paying job, or even getting married. Remember that even though your mortgage payment has gone down you will not realize a savings from refinancing until you break even from your expenses.
You can calculate how long it will take you to break even by dividing your total costs from refinancing (closing costs, points etc) by the amount your mortgage payment went down each month and dividing by twelve. This will tell you the number of months it will take to recoup your expenses from refinancing the loan.
If you are unable to qualify for a lower interest rate when refinancing your mortgage you can still lower your monthly payment by extending the term length of your loan. This is a less desirable option as it will result in paying more to the lender for financing; however, as a short-term solution it could provide much needed relief to your monthly budget. Term length is simply the amount of time you have to repay the loan and along with your interest rate determines your payment amount. Common term lengths are 15 or 30 years; however; there are now mortgage loans available with 40 and 50 year term lengths.
Homeowners who are able to qualify for a lower mortgage rate could lower their payment amount further by combining both options. Extending the term length with a lower mortgage rate would allow you take advantage of the lowest payment while paying less to the lender for your financing. You can learn more about your mortgage refinancing options, including costly pitfalls to avoid with a free mortgage toolkit.
To get your FREE Mortgage Refinancing Video Toolkit, visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this "Mortgage Refinancing Toolkit," which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com
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Refinancing Mortgage Rate
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