Wholesale Mortgage Rate Calculator

---

If your monthly mortgage payments are eating your hard-earned income, then you're probably looking for some financial relief. You don't have to make drastic changes in your life.  Give yourself some breathing room for other expenses in your life by following these seven ways to reduce your mortgage payments.

Anytime a person purchases a home they are required to pay a down payment for the loan. When the down payment is less than 20% of the value, the buyer must purchase private mortgage insurance (PMI). Over the course of several years, PMI can cost you tens of thousands of dollars. The good news is that you can drop PMI. Contact your mortgage lender to start the process of getting rid of PMI. The normal requirement is that you repay enough of the loan to equal 20% equity.  Depending on the potential value of your home, your lender may send an appraiser to value the home. Afterward, the lender will calculate how close you are to the equity mark. Dropping PMI from your monthly mortgage payments may add up to hundreds of dollars back in your pocket.

Refinancing gives you a new mortgage rate and monthly payment amount. There are a couple of things to consider including the age of your loan and the difference of interest rates. Most loans are amortized over the course of 15 to 30 years. The front end of your monthly mortgage payments are heavily interest bearing. As time goes on, you will be paying mostly the principal. If you refinance, it's best to do it early in your loan life cycle while you're mainly paying the interest. It wouldn't make sense to refinance towards the end of the loan. Refinancing usually carries closing costs, so be sure the interest rate difference is worth the time and money. If you purchased a home with a 4.50% interest rate, it won't be worth refinancing for a 4.35% interest rate. Don't forget that refinancing also resets your amortization life cycle. Weigh the better interest rate and smaller monthly payments against starting in year one again.

Refinancing might not be an affordable or effective option for you. At one time you might have been able to afford the high monthly mortgage payments of a 15 or 20-year loan.  Extending the repayment terms will lower your monthly payments but raise the interest rates. The most likely scenario is that your new term will be 30 years. With lower payments, you might be able to get above water and reassess your financial future. If you find yourself in a better situation a few months after getting a longer loan, feel free to revert to paying more. 

When you purchase a home with a loan, part of your mortgage payment is deposited into an escrow account. The escrow account uses that money to pay for taxes and insurance.  Your property tax is configured by the county assessor. Sometimes the assessors value a home too high and assign a higher tax number.  You have the right to request a new assessment. It will require filing with the county and a hearing with the State Tax Equalization Division.  If you are approved an assessor will come out and reassess the property. A lower assessment will mean lower payments for you. Remember that a county assessment is different than an appraisal. An assessment is for tax purposes only and not to be used as a market value of a home.

Do you have extra bedrooms? Do you have a garage or shed? Rent out part of your home to make some extra revenue to help pay down your mortgage. You can negotiate utilities and amenities, but a base monthly rent to live or use the property will help.  If you plan to leave for extended periods of time, rent out your home or room on Airbnb. Make some extra cash when you go on vacation or extended business trips.  For bigger properties, consider renting out your estate for events or gatherings. You could end up starting a healthy business. 

Most lending institutions are going to require a down payment for their home loans. While there are programs designed to help you pay a down payment, the normal amount is said to be 20% of the purchase price. If you're in a comfortable situation and in no rush, consider paying much more than the normal 20%.  A bigger down payment shows the bank that you are less risky to give a loan. Your interest rates will be smaller. Don't make the payment too large or the bank will give high interest rates. Remember, your interest rates and monthly mortgage rate is also affected by your credit score. Pay your bills and debts on time and avoid an uncomfortable conversation with your lender. 

Ask your lender about interest-only mortgages. These mortgages split your payment into two parts.  The first part of the mortgage requires you to only pay the interest. The second part of the mortgage has you paying some interest and the principal. Remember that 30-year mortgages are back loaded. You will have lower payments for the first few years before it jumps to a higher amount.  Interest-Only mortgages temporarily lower your payments for the first few years allowing you to make necessary financial moves. The loan works as long as you pay more after the interest-only part is completed.

Are you buying a home? Do you have monthly mortgage payments that are drowning you? Have you considered any of our relief tips? Everyone's situation is unique and each solution will be different. Following these tips could be the answer to your financial obstacles. Review your situation with a trusted lender and evaluate your options. If you're ready to make a decision, contact us to solve your mortgage issues.