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Lisa M Roche
NMLS: 191874
Lisa M Roche

Lower Your Payment

There Are Several Ways to Lower Your Payment

If you’d like to lower your payment there’s no time like the present. Interest rates are at all-time lows, meaning you can refinance and enjoy lower monthly payments in most cases. Here are a few options to consider that will help lower your payment:

1. Eliminate mortgage insurance - For borrowers buying or refinancing a house with less than 20% down, there’s a fee that they will incur which will apply to the overall loan payment and increase the monthly payment. The borrower must pay for mortgage Insurance, which insures the lender against loan default. Also known as PMI (Private Mortgage Insurance), mortgage insurance can cost the borrower a few hundred dollars each month. Naturally this monthly insurance premium makes the cost of owning a home more expensive. The smart homeowner might be able to borrow secondary funds to bring their down payment to 20% of the loan, thus avoiding the PMI. Talk to the financing professionals at Mortgage Options for details.

2. Access the equity in the house without re-applying. Combine a Mortgage Options first mortgage with home equity financing to come up with a minimum of 20% down in order to avoid the PMI. You only have to complete one application and attend one closing for both financial products, and you can select from a range of fixed-rate financing choices.

3. Refinance for a longer-term loan. If you can refinance your mortgage to a longer term, you’ll be able to lower your monthly payment. Another option, if bills are causing cash-flow problems, is to think about a debt consolidation, which will lower your total monthly bill payments amount.

4. Pay one or more points to lower your interest rate. If you lower the interest rate, you will lower your monthly payment. You could consider paying points up front to lower your interest rate, especially if you’re going to stay in the house for a long time. One point is the equivalent of 1% of the loan. That one point will usually reduce the interest rate by one-fourth of a percentage point.

This is a great time to lower your payment. By refinancing your home now you can take advantage of historically low interest rates, meaning lower monthly payments.